FSCS

masonic

dunstonh said:

masonic said:

Keep_pedalling said:

Was this Woodford?

My guess is WealthTek. Failed last year. Approx. £80m shortfall in custody assets, which were held by WealthTek without the necessary regulatory permissions. Very likely a fraud and money laundering operation under the hood, and yet another example of the FCA asleep at the wheel and unresponsive to whistleblowers. Though I can't find the pensioner story alluded to by the OP.

It was in the Telegraph
https://www.telegraph.co.uk/money/pensions/private-pensions/lost-pension-to-fraud-administrators-taking-compensation/

79% of investors will get full compensation.  300 savers [sic] will be up to £23k worse off.

You're probably right about that being the article the OP read, but quite a discrepancy between "300k" and “£160,000".

According to the JSA proposals, WealthTek had assets under management of c. £233m. The shortfall was therefore just over a third of the total, which is shocking, but goes to show just how much risk is taken on with obscure providers. I'm not fully convinced the pensioner (£160k loss) in question has really lost everything they have invested (though this is possible). Assets are being transferred to a nominated broker (another obscure one unfortunately), while others are considered 'tainted' and are being held during the FCA investigation, but may be returned eventually. So there may be some investments belonging to this pensioner that haven't gone walkies. In which case he may be able to exercise the 'liquidation option' in the distribution plan in order to receive the full £85k, assuming there are sufficient residual assets that could be sold. If all of the assets were missing, it makes you wonder where the dividend payments were coming from - Ponzi scheme?

A shortfall in a particular asset usually results in a pooling event between all holders of that asset, so like obscure investment firms, obscure investments themselves present a greater risk as it is easier for 100% of an obscure investment to go walkabout than 100% of a highly popular fund or share. The Schedule of Assets to be returned makes interesting reading. A few are indeed 100% missing or close to it.

If this pensioner has suffered a 100% loss then the FSCS will repay just under 39p in the pound after costs. The recovery would have been much worse if it had been a £300k loss.

Hopefully the FSCS will be able to start making payments soon. The £62k may be a painful reduction on what was hoped for, but at least it will give this chap a reprieve from the extreme financial hardship.

My advice to anyone who is embroiled in this and has assets moving to the nominated broker is to move them again ASAP to a mainstream provider.