What to expect from an Investment Wrap Account once probate granted?

Cubicsrube

[note, I asked a similar question a week or so back but no responses - so mods, please feel free to delete that one & if I'm putting this in the wrong board I apologise, please move it!]

Trying my question again - can anyone advise what my options and considerations should be with an investment wrap account now that I have probate? The web site of the wrap fund provider is incredibly vague about the process, there is nothing specifically about what should happen.

For e.g. I assume the account was frozen when we notified of death but should we be trying to time the sell-down of the assets to maximise their value?

Should the IFA who managed the wrap for the deceased have exercised judgement or advised us on this?

Is there any fiduciary responsibility or even timeframe within which the wrap account provider is supposed to act?

Context: The probate certificate was provided in Feb, still no news and since then a war has broken out and stocks have tanked!

This may all be completely normal but doesn't feel it…. Thanks v much for any advice from people who've been through similar or have professional knowledge in this area.

Keep_pedalling

Unless you have a crystal ball then maximising the value is just guesswork, the same applies for the financial advisor..

Have you actually given any instructions regarding disposing of the assets yet?

pcgtron

Not sure what provider your wrap account is with, but I've been in a similar situation recently, and here is my timeline.

Death occured 10th November. Wrap provider notified via finanicial advisor approx 2 weeks later.

I used the direct payment system to pay the IHT bill and this was taken from the wrap account and paid directly to HMRC. Took approx 15 days to action this part.

Probate was granted Mid March. I send the documents that had already been requested and I was aware of to the provider on the same day as probate certificates recieved.

All monies were paid into the executor account 7th April, approx 15-20 days after they recieved the probate certificate, with Easter in the mix as well. The financial advisor has been copied into all emails, but not the hard copies of documents, those were sent directly to the provider, but I kept them updated via email of all documents I sent to the provider.

Not sure if my one is normal or not as it's the first time I've ever done anything like this, but I wasn't concerned about the investments going up or down. As it turns out, the estate is approx 10K up since provider was notified of the death so all in all a good outcome for us.

I chased the provider once myself to make sure they recieved everything, and the financial advisor was all over it for me. Your situation seems long to me

Smudgeismydog

My understanding is the investments would remain as they were prior to death, so not frozen, but still in the same investments. The wrap provider can take instruction from you or the IFA, but the IFA would not be able to provide you with regulated advice.

Cubicsrube

Thank you both for the input.

The situation is that we got a valuation for the wrap account back in July, when we supplied the death certificate, but didn't get probate until early Feb by which time the wrap had migrated from James Hay to Nucleus. We supplied the probate grant and completed forms for disbursement to the IFA right away, but heard nothing back. When we chased a month later, the IFA was very vague about status, whether sell-down had started, etc. By then a war had started. We started to get worried that the IFA had dropped the ball and not submitted the forms, and that all the asset values would be down…and that got us curious about how it is supposed to work - whether the IFA has any accountability or fiduciary duty to Mum's estate, to execute things promptly? They have been very avoidant of answering the questions about the timeline and their role.

Until today: we were just notified that Nucleus has transferred the funds to our executor account.

I'm very unhappy with the delay of over 8 weeks but who should I direct my concern to - the IFA or the wrap providers? Are there any standard or legal requirements around this process that have been breached?

Albermarle

Context: The probate certificate was provided in Feb, still no news and since then a war has broken out and stocks have tanked!

It is common for people to assume that bad news globally always means bad news for stock markets, but quite often that is not the case when you check the actual figures.

Taking a start point of Mid February to today.

FTSE 100 Up 1 %:

S&P 500 - No change

Standard 60: 40 medium risk fund + 2%

Of course we have no idea what the investments are, so they could have done better or worse. However the main point is that stocks have not tanked, and are in fact rather stable.

 but should we be trying to time the sell-down of the assets to maximise their value? Timing the market correctly is notoriously difficult.

Should the IFA who managed the wrap for the deceased have exercised judgement or advised us on this? The IFA will not know any more than you/me about the future direction of markets, as none of us can see into the future.

Cubicsrube

Thanks Albemarle. Helpful as always.

My own retirement investment account (held in US) had tanked when I first posted, so without visibility into my mother's holdings, I feared similar for hers. In fact things have evened out since the first few weeks of the war, as you point out.

At this point, the value is what it is, and it's just been paid out, so that concern is moot.

I still have the question: what responsibility does an IFA and/or investment wrap provider have, once probate is provided, to execute the executors' instructions in a timely manner? Theoretically, if there was an 8-week delay in them acting, during which the market collapsed a la 1929 or 2001, would I have any recourse?

My question is not purely theoretical, as members of the family use both this IFA and wrap provider and I'm wondering if they should reconsider…

poseidon1

Not necessarily relevant to the OP now that dust has settled in their case, but the following article suggests whatever contractual obligations owed by IFA to a client ceases at their death.

At that point IFA's are encouraged to create a contractual relationship with the executors, to provide ongoing and presumably proactive services ( seems some may not be aware that death curtails the contract) -

https://www.moneymarketing.co.uk/analysis/what-happens-to-client-agreements-fees-and-data-on-death/#:~:text=Probate%20cannot%20usually%20be%20granted,client%20agreement%20is%20in%20place.

Seems to me that works both ways, and executors should be reaching out to formalise a relationship if the IFA feels shy of appearing to be an 'ambulance chaser ' or do not realise they should be formalising a new arrangement, since aims and objectives will have changed as a result of the client's death.

Cubicsrube

to close the loop on this thread, in case others are searching for similar info in the future: what we discovered is that between probate and distribution, as executors you are somewhat in a no-mans land. You are not "the client" and have no contractual agreement with the IFA but you are at their mercy since all communication with the wrap investment account goes through them. They aren't supposed to keep charging during this time but the wrap provider can continue extracting platform fees.

As Poseidon advised, executors can formalise a relationship if they want the IFA to continue to manage the funds but there is no point in doing that if the intent is just to liquidate and disburse a soon as probate is obtained - i.e. the IFA is not providing any advice, management or 'probate work', other than forwarding the death and probate certificates on. This is the position we were in and the IFA was just very slow and avoidant as we tried to get the funds liquidated, but we had no leverage since they were not contractually obligated to us. In theory there's nothing to stop the IFA from taking their sweet time and the wrap platform raking in the fees… It seems like a flaw in the system.

If you want the IFA to help figure out how to disburse or reinvest, then you need to sign a new agreement with them right away. If not - get ready to be patient.