Fluid ISA Bond 1 Limited

Cazza751

So, my parents have been recieving relentless letters from scammers since NPI went into liquidation. They bond is with Fluid. I called FRP, who's dealing with it and they told me I had to contact Fluid. I found the Email through the FCA website, as advised and emailed. Thier reply looks legitimate and they recited the letter we had in Oct, stating that FRP will be supplying clients details for payments but to be patient as it may take some time Due to gdpr, they did however state my parents could supply thier bank details directly to them should they wish. Is this what you did dancing_al? Is this safe? 

masonic

Cazza751 said:

So, my parents have been recieving relentless letters from scammers since NPI went into liquidation. They bond is with Fluid. I called FRP, who's dealing with it and they told me I had to contact Fluid. I found the Email through the FCA website, as advised and emailed. Thier reply looks legitimate and they recited the letter we had in Oct, stating that FRP will be supplying clients details for payments but to be patient as it may take some time Due to gdpr, they did however state my parents could supply thier bank details directly to them should they wish. Is this what you did dancing_al? Is this safe? 

There is little risk in providing bank details to anyone. The only risk is that they could set up a rogue direct debit, for which you'd be entitled to an immediate refund from your bank (see Jeremy Clarkson prank: http://news.bbc.co.uk/1/hi/7174760.stm ).

It seems a bit odd that they claim not to have sufficient information to make direct payments to customers or make contact with them pro-actively, yet are apparently willing to make bank transfers to people who contact them claiming to be a bondholder. How do they intend to verify details and carry out the necessary Know Your Customer checks? If scammers have got hold of customer details, then they will surely be trying to impersonate customers as well as barrage them with letters.

Tracy66D

I am also waiting for my bond payment that matured end of November 2021, I have contacted Fluid directly and have had emails apologising for the delay, but most recently an attached letter signed The Directors dated 25th January 2022, explaining they are in the process of restructuring across the wider group to reallocate funds to facilitate payment. It also states that its there intention to resolve these matters in the next few weeks and will be in touch in due course with further updates.
Does this sound normal practice? and anyone else had the same or similar.
I have also had letters proclaiming to be from Northern Provident which have been deemed NOT genuine by Fluid, I also contacted the FCA who warned that Fluid has been targeted by scammers and to forward the letters onto FRP Advisory. So be very suspicious of any letters you receive that appear to be from Northern Provident regarding your Fluid Bond. It is all very concerning and really hoping that Fluid will still honour the payments to its Bond Holders

masonic

Tracy66D said:

Does this sound normal practice?

Certainly not. The group was structured so as to ring-fence bondholder assets within individual holding companies. This gives bondholders some protection if other group companies get into financial difficulties. There doesn't seem to be any reason to delay repaying bondholders until after any restructuring. The relevant holding companies can be dissolved once bondholders have been repaid and they are depleted of assets, so it all seems totally unnecessary. By not repaying bondholders in line with their obligations, the company is technically insolvent. Perhaps I'm being overly cynical, but I can't think of a plausible reason for the restructuring other than to make it easier for bondholder assets to mysteriously disappear.

Tracy66D

Thank you Masonic, you seem to have a better understanding than I have on this, I have been on Companies House today and Fluid ISA Bond 1 Ltd is still active but noticed that Mr William Jackson has just resigned as director, so not sure if thats a bad omen? If it is technically insolvent, surely bondholders assets cannot just mysteriously disappear and an investigation would take place to ascertain where the funds are, or I am being to naive in my thinking? from literature given it states that Fluid assets are held in trust to protect investors in case either the borrowers lending company or Fluid fails to meet its commitments. It is all very concerning and wish I could get more information on what as Matured Bondholder you can do going forward, or any organisations that can help, I was given a suggestion of Resolver and will look into this, does anyone else have suggestions?

masonic

There is very little that is known for sure at this stage. William Jackson was the finance director of the group, and could have moved on for any number of reasons. The letter you received mentioning needing to restructure to reallocate funds to facilitate payment is more concerning, as if things were as they should be, this would be unnecessary. Behind a company like this there will be a lending business, and your money will have been lent out to borrowers. When all is well, the borrowers make repayments of loan and interest, and this is used to pay bondholders. But borrowers do not always repay their loans, and that would create a problem.

As a bondholder, you'll have a much greater understanding of who money was being lent to than me, but it would typically be to high risk borrowers who would struggle to get credit from conventional lenders such as banks. A lender would often take out a charge against property of the borrower in case they were unable to repay, and in this case it would be held in the ring-fenced trust company for the benefit of bondholders. Based on the information you received, it seems a proportion of the loans made using bondholder money has not been repaid, and for some reason the assets that are supposed to be held in trust have not been used to make up the shortfall.

As the company is now talking about restructuring and reallocating funds, it suggests the assets aren't there. But what funds are being reallocated, and from where? It's very unlikely the parent company has sufficient assets to cover the repayment of bondholder money that has been lost, so another possibility is that they'll "restructure" so that they access money held in trust for one set of investors to repay an earlier set of investors. That would be a very bad sign indeed.

As to what you can do, you bought the investment from an FCA Authorised firm that has now gone bust. There is no longer a complaints process you can use. Usually in the situation a company defaults on its debts, one or more large creditor will issue a statutory demand for payment, followed by applying to the court to appoint administrators. When the creditors are many bondholders, each with exposure of a few thousand pounds, it becomes infeasible for any one of them to initiate action. I believe Fluid Trust plc is outside of the jurisdiction of the FCA.

The only options available would therefore be to wait and hope, or try to force the issue through legal proceedings. If Fluid is genuinely trying to do what it can to realise the best outcome for bondholders, then they will probably achieve more if left alone than would be stripped from their carcass if forced into administration. On the other hand, if they know they are done for, and are just stalling for time while they strip what they can from the business before abandoning it, time is of the essence. It's a tough one, but it was always a high risk investment with 100% loss potential, and 100% loss was a possible outcome even with no wrongdoing.

jimjames

Tracy66D said:

If it is technically insolvent, surely bondholders assets cannot just mysteriously disappear and an investigation would take place to ascertain where the funds are, or I am being to naive in my thinking? 

Unfortunately a company can make a loss and the assets would no longer be there. It's one of the risks of lending money to a small company where there are no guarantees.

Tracy66D said:

 from literature given it states that Fluid assets are held in trust to protect investors in case either the borrowers lending company or Fluid fails to meet its commitments. It is all very concerning and wish I could get more information on what as Matured Bondholder you can do going forward, or any organisations that can help, I was given a suggestion of Resolver and will look into this, does anyone else have suggestions?

As above there is very little you can do as it is an unregulated investment. The trust notion doesn't really do anything as LCF bondholders found out, it's just a nice marketing gimmick that sounds good on paper. 
I'm not sure what Resolver could do, if the company has no money then there isn't anything for bondholders to get.

Without seeing the paperwork or knowing how you invested (I'm assuming you weren't advised by an FCA regulated adviser and NPI were just the manager) it's hard to know any other avenues.

It looks like their website has been down for some time for "maintenance". Can you still access the bondholder part?

Tracy66D

Thank you once again Masonic, you have a good way at explaining things and really appreciate the time you have taken to comment. I was aware of the potential risk when I invested into the Fluid Bond 1, 3 years ago last November and everything was fine up until Northern Provident went into liquidation. I did hold out hope when Fluid contacted me with an update in October as follows:

To the date of the CVL, NPI acted as IF-ISA Manager for Fluid ISA Bond 1 Limited Bonds, providing the IF-ISA wrapper for Fluid Bonds. The firm also managed payment processing for investor interest payments. Any funds invested in Fluid Bonds remain with Fluid and will do so until the bonds mature. Going forward, Fluid will be taking on the responsibility of payment processing for quarterly interest payments and bond maturities. We are liaising with the liquidators, FRP, to arrange secure transfer of payment details of bondholders. However, this will likely take longer than expected due to FRP liaising with data protection consultants, and this may lead to delays in some maturity payments. As FRP have not yet been able to provide these details to date, it means that the quarterly interest payment to Fluid ISA Bond 1 Bondholders on 5th October 2021 will be delayed. We are liaising with FRP to ensure these delays do not continue longer than necessary. We have already begun to pay out maturity redemptions to some early investors. While we are not requesting that investors provide bank details to us at this time, bondholders may do so if they wish. We recommend in the interests of security, that bondholders contact us via email (info@fluidisa.com) to arrange a call back appointment.

Fluid did email me again in November with details of the matured bond, so I did contact them and at the time I was hopeful that payment would be made before Christmas with apologies in the delay, but alas it seems not as positive now, I have contacted them again with some of the points you made but as yet not received a reply. My only hope now really is that fluid are genuinely trying to do what it can, but as you rightly say it was high risk.

Tracy66D

jimjames said:

Without seeing the paperwork or knowing how you invested (I'm assuming you weren't advised by an FCA regulated adviser and NPI were just the manager) it's hard to know any other avenues.

It looks like their website has been down for some time for "maintenance". Can you still access the bondholder part?

You assumed correctly, I was advised by someone I have no association with now, and its highly likely they are in the same situation as I am, with hindsight I should of thought more of the risk, all seemed fine until Northern Provident went into liquidation, Fluid did send the reassuring emails that they would be taking over the payment side of things etc, its only now there correspondences are not so positive. As for the website it has been down for quite sometime but I could sign into my portal up until the I got the email from Fluid detailing that my Bond had matured, now if I try its just blank and takes me no where. I am hoping that Fluid are genuinely trying do what they can for its bondholders, and if not all some of the initial investment will be paid, it just seems a waiting game, but the company Fluid ISA Bond 1 limited on company house is still active so hope thats a good sign. Thank you and really appreciate you taking the time to comment jimjames

jimjames

I had a look at the company and the most recent accounts to 2020 show it did have a surplus which is a good sign compared to many other bond companies that were showing negative asset value. However that was 2020 so a lot mighty have changed in that time but hopefully it's the admin rather than anything else.