SVS Securities - shut down?

eskbanker

I wasn't claiming that paper share certificates are a sensible, or even usable, alternative, but simply that the mere act of using brokers inherently loses direct control and entails you having beneficial ownership rather than something you can touch at all times.  There are analogous conversations on the banking board where posters splutter about controls on access to large amounts of cash on the basis of 'but it's MY MONEY' as if that was relevant.

And if one of your criteria for platforms is 'cheap and basic' then that approach isn't without risk if you end up narrowing your search to smaller players.  Genuine question(s): what attracted you to SVS in the first place, which alternatives did you evaluate and on what criteria did you base your decision?

johnburman

FCA authirised; over 10 years trading; member London Stock Exchange; Transparent costs; good website; financial stability; no bad press (well up to a year ago.  there was nothing to suggest SVS woudl anything other than stable.  Remeber however that I was a XO client - i did not go into the other services SVS offered and with hindsight I should have done.  The special administration process is an attempt to make life easier for XO-type clients (and clients of FS suppliers), but as we have seen it is slow.  and is dependent on administrators on £450 ph.
Point is the average Joe must rely on FCA Registration ...and the FCA simply is not good enough as a Regulator and a 'protector of the consumer'; nore is the Special Admin. process fit for purpose for consumers.    

eskbanker

johnburman said:

FCA authirised; over 10 years trading; member London Stock Exchange; Transparent costs; good website; financial stability; no bad press (well up to a year ago.  there was nothing to suggest SVS woudl anything other than stable. 

But those are generic criteria applicable to practically everyone - what I was getting at was specifically why not use mainstream providers like HL, or II, or Fidelity, or CSD, or IWeb, etc, etc.  Granted the press coverage is arguably a differentiator, but clearly the profile of major players brings with it press attention and if you pick a company without much press (or only good stories) then it's important to consider why that might be.

johnburman said:

Point is the average Joe must rely on FCA Registration ...and the FCA simply is not good enough as a Regulator and a 'protector of the consumer'  

But I'd reiterate that such authorisation is necessary but not sufficient, i.e. it's unwise to assume that a company that's FCA authorised must inherently be stable and secure, merely that it's obliged to conduct its business in accordance with various standards.

masonic

There was bad press about SVS Securities from prior to a year ago. A simple Google news search for SVS Securities would have revealed it (SVS XO didn't exist back then). The bad press included a couple of news articles in late 2014/early 2015 about the carbon credit trading fraud and SVS Securities' involvement in that. I'm as guilty as anyone else for not looking for such bad press at the time, but with a little bit more digging in those areas and monitoring of the situation, HMRC's involvement and the risk to the survival of the business would have become apparent.

I was quite naive back then, but have since learned that FCA authorisation does not mean the directors of a company aren't as bent as a nine bob note, and the smaller the company the more likely they are to fly under the radar.

[Deleted User]

Masonic - I don’t have a link for the figure of £50m fees, it may be wholly inaccurate. There was some mention earlier in the thread to £67m in relation to another case, and £900ph, in which case a single administrator would by now have racked up a million in fees, so the £3m figure could be similarly inaccurate.

As for doing my own research on stockbrokers and sharing my findings: I have been with Rowan Dartington for the best part of twenty years. They wouldn’t be for everyone, because their commission is high. Which is not to say I feel any sense of superiority to those who chose low cost options like SVS. Sometimes I dine in good restaurants, sometimes I choose Macdonalds. What I don’t expect from the Macdonalds experience is to be held culpable if the person taking my order pockets my money and runs away. Similarly, if I go to the theatre and leave my coat in the cloakroom, I do expect it to be there when I come back.
I don’t think that’s a high expectation.

johnburman

ZingPowZing.  Rowan Dartington is "part of the St. James’s Place Wealth Management Group."
So there is no way I would ever deal with them AND or perhaps because of that, there is no mention of fees on their website.  I wonder why?  Although - and to be fair to them - they do mention XO business on their website.

here_to_eternity

My third duckduckgo (other search engines are available) hit for "Rowan Dartington" begins:

In the summer of 2010 Rowan Dartington was on its knees. A hefty fine by the regulator for failing to adequately protect clients and the discovery of a £1.4m black hole in its accounts well and truly knocked the stuffing out of the Bristol-based discretionary wealth manager.

Crickey! That was well before SJP bought the company, and so far as the safety of client assets goes, I would have more confidence now that they are part of such a large group as SJP.

If there can be problems at both low-fee small firms (e.g. SVS) and high-fee small firms (e.g. Rowan Dartington, prior to its acquisition by SJP), perhaps we should just be avoiding small firms, when it comes to trusting an organization to safeguard our financial assets. It might seem a pity not to be supporting small businesses, and for many other kinds of businesses, I would agree with that. But in this case, the risks of doing so may be too high.

olderbutnowiser

I imagine that LC will have chosen one of the bigger brokers if only to ensure, as far as they can, that they are a safe pair of hands. Wouldn't be surprised to hear they've gone for HL or TSC (a la Beaufort) although there are other obvious candidates.

Thrugelmir

olderbutnowiser said:

I imagine that LC will have chosen one of the bigger brokers if only to ensure, as far as they can, that they are a safe pair of hands. 

With 20,000 retail clients would require someone with the (potential) administrative and systems capacity to undertake such an intake. With the minute the accounts are reactivated there's going to be a deluge of work as well. Be unrealistic for one of the smaller broking houses to undertake such a task in a short time window. 

eskbanker

ZingPowZing said:

What I don’t expect from the Macdonalds experience is to be held culpable if the person taking my order pockets my money and runs away. Similarly, if I go to the theatre and leave my coat in the cloakroom, I do expect it to be there when I come back.

Fortunately in the regulated platform failure scenario, you get your Macdonalds after a conversation with the manager, and the cloakroom finds your coat....

* waits for ill-fitting analogies to be twisted yet further *