FCA - loss of supplementary income

masonic

This is quite a relevant explanatory statement on the Stellar Asset Management (SAM) site about the situation:

This explains why assets managed by Stellar have been frozen and will be mixed up in the special administration. WealthTek was in custody of those AIM assets when it failed. I suspect, contrary to what you believe, OP, WealthTek has custody of your assets too.

masonic

Scappat said:

masonic said:

Scappat said:

JamesRobinson48 said:

Googling Wealthtek, I perceive that the FCA has intervened in an effort to assist retail investors who might have been a victim of criminality. Also it seems questionable whether Wealthtek held regulatory permissions to hold client money. I trust all the above would be very evident online to OP also.

OP says "My investments are with a small independent company".  Obviously none of my business, but it would be interesting to know whether that "small independent company" is truly independent, or is it controlled by or connected to the same person who controlled Wealthtek?   Is OP sure that the "small independent company" itself holds regulatory permissions for the activities that OP has been using it for?  And finally, how did OP come to be using that "small independent company"?  I'm wondering if possibly OP might have been scammed from start to finish.  For example, did OP get an unsolicited approach from the "small independent company" to invest in the first place?  Were these genuine investments in reputable businesses, or was it perhaps entirely fraudulent from the moment OP first paid his cash away?  I hope I am not being too suspicious or alarmist in fearing the worst.

  My investments are handled by a financial advisor who has worked with my family since the 1980s so I was not subject to a scam. My assets are ring fenced in a guardian bank. I am not a client of Wealthtek. My position is similar to clients of Stellar. Neither the FCA nor BDO - the Special Administrators - care that people have been deprived of their income since April and there is no indication of when access might be restored. Can it really be lawful to do this? 

If what you write here is true, i.e. your assets are completely segregated from those implicated in the Wealthtek debacle, and Wealthtek / Vertem / Mallioch Melville are not acting as custodians for your assets, then there is no reason the actual custodian shouldn't find a way to transfer your income payments to you. They would no doubt have an obligation to do so, and if they cannot meet it, then that puts them at risk of going into administration. But based on what you have written, they should have been able to enlist the services of an alternative provider by this point.

So on your point of lawfulness, based on the above, the FCA and BDO have nothing to do with your dispute against the unnamed small independent company that owes you money. You could go through the formal complaint procedure and through to the Financial Ombudsman Service if necessary, or issue a statutory demand, take them to the county court and ultimately issue a winding up petition if what they owe meets the threshold for this.

Do you know the name of the custodian used by your small independent company?

My financial advisor worked for Malloch Melville, which has been misleadingly labelled as a trading name of Wealthtek. I have spoken to the Financial Ombudsman and they can’t help as the company no longer exists. BDO have lead me to believe that my assets are safe. The guardian bank is Caseis. I have been told that I should try contacting them directly re an in specie transfer. 

£81.4 million is a rather large chunk and as Wealthtek was an FCA regulated company it seems that the FCA wasn’t doing a particularly good job of regulating.  The FSCS doesn’t kick in immediately and I can’t live on fresh air. Getting information out of BDO is like getting blood from a stone. But worse.

Malloch Melville (company number 09588651) was incorporated in 2015 under the name "Malloch Melville Investment Management", but swiftly changed it to "Malloch Melville LTD" the same year and never held FCA authorisation to hold or control client assets. It was formally an appointed representative of other FCA authorised firms. Last year, it changed its name again to "Windygates Holdings LTD". It currently holds no authorisation to provide regulated financial services of any kind. It therefore cannot be the company holding your assets.

It appears that it sold the trading name "Malloch Melville" to WealthTek in January 2020. Prior to this, presumably it was acting as an appointed representative of WealthTek, and just a partnership of financial advisers.

The "mallochmelville.co.uk" website was registered in July 2015, around the date of your company's incorporation. It was last renewed in August 2022 and is currently controlled by the WealthTek administrators. This could not have happened involuntarily. Someone is not telling you the whole truth.

Scappat

masonic said:

Scappat said:

masonic said:

Scappat said:

JamesRobinson48 said:

Googling Wealthtek, I perceive that the FCA has intervened in an effort to assist retail investors who might have been a victim of criminality. Also it seems questionable whether Wealthtek held regulatory permissions to hold client money. I trust all the above would be very evident online to OP also.

OP says "My investments are with a small independent company".  Obviously none of my business, but it would be interesting to know whether that "small independent company" is truly independent, or is it controlled by or connected to the same person who controlled Wealthtek?   Is OP sure that the "small independent company" itself holds regulatory permissions for the activities that OP has been using it for?  And finally, how did OP come to be using that "small independent company"?  I'm wondering if possibly OP might have been scammed from start to finish.  For example, did OP get an unsolicited approach from the "small independent company" to invest in the first place?  Were these genuine investments in reputable businesses, or was it perhaps entirely fraudulent from the moment OP first paid his cash away?  I hope I am not being too suspicious or alarmist in fearing the worst.

  My investments are handled by a financial advisor who has worked with my family since the 1980s so I was not subject to a scam. My assets are ring fenced in a guardian bank. I am not a client of Wealthtek. My position is similar to clients of Stellar. Neither the FCA nor BDO - the Special Administrators - care that people have been deprived of their income since April and there is no indication of when access might be restored. Can it really be lawful to do this? 

If what you write here is true, i.e. your assets are completely segregated from those implicated in the Wealthtek debacle, and Wealthtek / Vertem / Mallioch Melville are not acting as custodians for your assets, then there is no reason the actual custodian shouldn't find a way to transfer your income payments to you. They would no doubt have an obligation to do so, and if they cannot meet it, then that puts them at risk of going into administration. But based on what you have written, they should have been able to enlist the services of an alternative provider by this point.

So on your point of lawfulness, based on the above, the FCA and BDO have nothing to do with your dispute against the unnamed small independent company that owes you money. You could go through the formal complaint procedure and through to the Financial Ombudsman Service if necessary, or issue a statutory demand, take them to the county court and ultimately issue a winding up petition if what they owe meets the threshold for this.

Do you know the name of the custodian used by your small independent company?

My financial advisor worked for Malloch Melville, which has been misleadingly labelled as a trading name of Wealthtek. I have spoken to the Financial Ombudsman and they can’t help as the company no longer exists. BDO have lead me to believe that my assets are safe. The guardian bank is Caseis. I have been told that I should try contacting them directly re an in specie transfer. 

£81.4 million is a rather large chunk and as Wealthtek was an FCA regulated company it seems that the FCA wasn’t doing a particularly good job of regulating.  The FSCS doesn’t kick in immediately and I can’t live on fresh air. Getting information out of BDO is like getting blood from a stone. But worse.

Malloch Melville (company number 09588651) was incorporated in 2015 under the name "Malloch Melville Investment Management", but swiftly changed it to "Malloch Melville LTD" the same year and never held FCA authorisation to hold or control client assets. It was formally an appointed representative of other FCA authorised firms. Last year, it changed its name again to "Windygates Holdings LTD". It currently holds no authorisation to provide regulated financial services of any kind. It therefore cannot be the company holding your assets.

It appears that it sold the trading name "Malloch Melville" to WealthTek in January 2020. Prior to this, presumably it was acting as an appointed representative of WealthTek, and just a partnership of financial advisers.

The "mallochmelville.co.uk" website was registered in July 2015, around the date of your company's incorporation. It was last renewed in August 2022 and is currently controlled by the WealthTek administrators. This could not have happened involuntarily. Someone is not telling you the whole truth.

Thank you for this. Does this also mean that my assets aren’t ring fenced after all? 

masonic

Scappat said:

masonic said:

Scappat said:

masonic said:

Scappat said:

JamesRobinson48 said:

Googling Wealthtek, I perceive that the FCA has intervened in an effort to assist retail investors who might have been a victim of criminality. Also it seems questionable whether Wealthtek held regulatory permissions to hold client money. I trust all the above would be very evident online to OP also.

OP says "My investments are with a small independent company".  Obviously none of my business, but it would be interesting to know whether that "small independent company" is truly independent, or is it controlled by or connected to the same person who controlled Wealthtek?   Is OP sure that the "small independent company" itself holds regulatory permissions for the activities that OP has been using it for?  And finally, how did OP come to be using that "small independent company"?  I'm wondering if possibly OP might have been scammed from start to finish.  For example, did OP get an unsolicited approach from the "small independent company" to invest in the first place?  Were these genuine investments in reputable businesses, or was it perhaps entirely fraudulent from the moment OP first paid his cash away?  I hope I am not being too suspicious or alarmist in fearing the worst.

  My investments are handled by a financial advisor who has worked with my family since the 1980s so I was not subject to a scam. My assets are ring fenced in a guardian bank. I am not a client of Wealthtek. My position is similar to clients of Stellar. Neither the FCA nor BDO - the Special Administrators - care that people have been deprived of their income since April and there is no indication of when access might be restored. Can it really be lawful to do this? 

If what you write here is true, i.e. your assets are completely segregated from those implicated in the Wealthtek debacle, and Wealthtek / Vertem / Mallioch Melville are not acting as custodians for your assets, then there is no reason the actual custodian shouldn't find a way to transfer your income payments to you. They would no doubt have an obligation to do so, and if they cannot meet it, then that puts them at risk of going into administration. But based on what you have written, they should have been able to enlist the services of an alternative provider by this point.

So on your point of lawfulness, based on the above, the FCA and BDO have nothing to do with your dispute against the unnamed small independent company that owes you money. You could go through the formal complaint procedure and through to the Financial Ombudsman Service if necessary, or issue a statutory demand, take them to the county court and ultimately issue a winding up petition if what they owe meets the threshold for this.

Do you know the name of the custodian used by your small independent company?

My financial advisor worked for Malloch Melville, which has been misleadingly labelled as a trading name of Wealthtek. I have spoken to the Financial Ombudsman and they can’t help as the company no longer exists. BDO have lead me to believe that my assets are safe. The guardian bank is Caseis. I have been told that I should try contacting them directly re an in specie transfer. 

£81.4 million is a rather large chunk and as Wealthtek was an FCA regulated company it seems that the FCA wasn’t doing a particularly good job of regulating.  The FSCS doesn’t kick in immediately and I can’t live on fresh air. Getting information out of BDO is like getting blood from a stone. But worse.

Malloch Melville (company number 09588651) was incorporated in 2015 under the name "Malloch Melville Investment Management", but swiftly changed it to "Malloch Melville LTD" the same year and never held FCA authorisation to hold or control client assets. It was formally an appointed representative of other FCA authorised firms. Last year, it changed its name again to "Windygates Holdings LTD". It currently holds no authorisation to provide regulated financial services of any kind. It therefore cannot be the company holding your assets.

It appears that it sold the trading name "Malloch Melville" to WealthTek in January 2020. Prior to this, presumably it was acting as an appointed representative of WealthTek, and just a partnership of financial advisers.

The "mallochmelville.co.uk" website was registered in July 2015, around the date of your company's incorporation. It was last renewed in August 2022 and is currently controlled by the WealthTek administrators. This could not have happened involuntarily. Someone is not telling you the whole truth.

Thank you for this. Does this also mean that my assets aren’t ring fenced after all? 

The assets are "ring-fenced" in the sense they were held separately from the company's assets, but they are ring-fenced in a nominee account controlled by WealthTek. Ostensibly the same nominee account implicated in the alleged fraud and money laundering. So the ring-fencing appears to be less than perfect, to put it mildly.

While the situation looks pretty grim, you will have FSCS protection and in the fullness of time should recover all of your assets and unpaid income. It is just the bit in between that will be challenging for you if this income was relied upon.

Scappat

The situation is very grim, but there is also the worry that I won’t recover all of my assets as the ring fencing is ‘less than perfect’.   BDO is not at all clear on this, on the rare occasions when it is possible to speak to someone. 

masonic

Scappat said:

The situation is very grim, but there is also the worry that I won’t recover all of my assets as the ring fencing is ‘less than perfect’.   BDO is not at all clear on this, on the rare occasions when it is possible to speak to someone. 

I've been browsing through the Initial Proposals document. It appears at the present time that about a third of the investments are missing, and about three quarters of the cash. 

Any loss relating to cash balances will be shared equally between all clients in proportion to the cash on their accounts, so your loss in this regard would be up to 78% assuming no further cash is found. 

Investments are treated differently. Each holding (investment fund or share etc) will be reconciled separately. For any where there is a shortfall, the loss will be shared between each client who held the investment in proportion to the value they held. For some investments there may be no loss at all. For others, there could be substantial losses. BDO won't be able to disclose the situation until after their investigation is concluded, and will likely inform only the affected clients who hold one of the investments for which there is a shortfall. Your percentage loss in each affected asset would be the same as the percentage missing overall.

On top of this, there will be administrator fees to pay, which will likely be capped per investor.

You'd be entitled to claim for any loss from the above three items up to a maximum of £85k, so hopefully the amount you had invested doesn't expose you to losses greater than this. At a guess it will be >6 months before the outcome for clients is known and any claim can be made. It looks likely that the remaining assets will need to be bulk-transferred to an alternative investment firm, which could take close to a year to achieve (based on similar failed investment firms from the past).

Scappat

I know that I have very little cash, which is fortunate, but lasting for a year with no income is going to be hard. The FSCS would be more helpful if funds were available when needed - now. It is inconceivable to me that people can just be cast adrift, for an undefined amount of time, with no means of paying their bills

In the longer term, I can just hope that Dance didn’t take a fancy to any of my holdings. Nobody needs £81.4 million. 
The administrator fees are a bitter pill, although someone at BDO told me that they would be met out of the estate. As I said, they are not very clear. 

Many thanks for taking the time to explain all this to me.