collapse of Beaufort - how is it different to investment platforms we use

grey_gym_sock · 9 May 2018 at 8:57PM

i completely disagree that FSCS does more harm than good.

the basic model - of getting the good financial service providers to pay to compensate for losses caused by the bad ones - may be annoying (especially if you're 1 of those paying), but i don't think there's a better alternative.

however, the bill could be lower if the FCA were better at shutting down dodgy firms/investments more quickly.

dunstonh · 9 May 2018 at 9:45PM

the basic model - of getting the good financial service providers to pay to compensate for losses caused by the bad ones - may be annoying (especially if you're 1 of those paying), but i don't think there's a better alternative.

There is little alternative. Some have suggested an insurance type scheme that is paid based on the risk of the business being carried out. But nothing came of it.

The bit that is frustrating is the FCA's (and FSA before it) inability to target the firms that cause the problems. I have pointed out scams or issues to the regulator in the past and they dont want to know. For example, I tried reported a mortgage firm to the FCA who were transacting investment advice into unregulated investments using SIPPs. The FCA didnt want to know. Indeed, the lady got quite stroppy at me. The firm has now deauthorised and all complaints are being passed onto the FSCS. That firm never paid any investment class FSCS levies. The sellers in that firm were not individually authorised (mortgage and insurance individuals have no control functions). So, they can just phoenix and do it again.

Another frustrating thing is that the dodgy companies tend to have little history. They set up, dont pay any levies in year one and then close again by year 3-5. The firms/advisers with decades of history pay year in year out.

Cost of compliance with regulations is the major cost. Regulation, compliance with regulation and regulatory costs takes about a third of your income.

Col_Jessop · 10 May 2018 at 10:22AM

I'm not sure this should only be a matter for the FCA and PWC to manage. It is time Beaufort were properly investigated by the police. It looks pretty clear that this is more than just a simple case of bad advice being given and is looking more like cash and assets have been removed (stolen) from accounts. Why after all this time are clients still locked out of viewing their accounts?

greatkingrat · 10 May 2018 at 2:58PM

Does the FSCS 50k limit apply to the total assets, or the loss incurred? If someone had a 250k portfolio and the administrators take 20% fees, would they be covered because they have only lost 50k?

MK62 · 10 May 2018 at 3:41PM

In theory yes, however it would appear that it may in fact be far more nuanced than that.

You are in fact only covered for financial loss, which in the case of investments and the FSCS, means restoring your finances to the state they would have been in if you had never invested into the investment in default.

greatkingrat · 10 May 2018 at 7:48PM

So if you invested 10k 5 years ago and it has risen to 15k now they could just pay you back the 10k? I wonder if they would pay you back more than the current value if the investment had fallen?

MK62 · 11 May 2018 at 6:45AM

greatkingrat wrote: »

So if you invested 10k 5 years ago and it has risen to 15k now they could just pay you back the 10k? I wonder if they would pay you back more than the current value if the investment had fallen?

Good question!

Col_Jessop · 11 May 2018 at 11:48AM

Looks like things are starting to move. Email have gone out detailing the process. Even that is looking like a disorganised shambles. They are sending out what are effectively settlement offers. The Bar Date is the 8th June. It also has a fast track process for the FSCS claim - again that appears to be an offer rather than possibly all you are actually entitled to.

The process involves two emails - one with your user name - it tells you that a second email be will be sent "shortly" with a link to create your password. Over 24 hours now and no email. I suspect the process is broken rather than it just being PWC having a different interpretation to shortly than the rest of online world.

And just for fun I got a call from the FSCS with an update. The update was that nothing has changed and that they still have not agreed a process with PWC / FCA. I explained that we had recieved emails from PWC detailing the process and that the process was also published on PWCs website. The contact centre manager told me that the information on his system was correct and refused to investigate the misinformation. If anyone gets a call from the FSCS best to treat it like a scam call as they are a dangerous combination of incompetence and arrogance.

If you haven't got the email yet then the info is on the PWC website. I can't post a link - forum rules - if you google this you will find it - PWC beaufort bar date june

Col_Jessop · 14 May 2018 at 11:00AM

The chap from FSCS called back and left a voice mail. It still had the same arrogant tone; however it looks as if he did actually investigate and indeed found that his system was indeed wrong.

If anyone is depending on the FCA, PWC or the FSCS to protect their interests after the fraud at Beaufort then you need to wake up soon or face losing significant sums of money. The FCA let the Beaufort scam run longer than it had to in the full knowledge that investors were going to face significant losses. Investors were still able to pour more money into Beauforts known about black hole whilst being told that their money was safe as Beaufort was regulated.

PWC's first action was to lock everyone out of their accounts. Beauforts system was set at two levels of access. The base level was view only. There was then a 2 factor authentication system for carrying out transactions. Why not leave the view only access live so victims could check and se if there was anything missing from their account.

FSCS are bought and paid for by the finance sector. From what I have seen so far they are a shambles designed to frustrate and confound the victims of the finance sector rather than to protect us from fraud.

The Beaufort situation has the air of state sanctioned fraud / theft. Many clients are facing huge losses - often a large percentage of their retirement investments. We really need to see a police investigation into what has gone on at Beaufort including the FCA's part in delaying action against Beaufort and the subsequent lack of publically available information to victims and the removal of view only access to accounts.

Still waiting for a password to be sent - the Bar Date process is also looking like a shambles. Still no access to check what the actual offer is.

dunstonh · 14 May 2018 at 11:23AM

FSCS are bought and paid for by the finance sector.

The FSCS is not owned by the finance sector. It is financed by levies on regulated firms doing regulated activities (not unregulated firms). It is effectively the good firms paying the costs to cover the bad.

From what I have seen so far they are a shambles designed to frustrate and confound the victims of the finance sector rather than to protect us from fraud.

The FSCS is not there to protect you from fraud. It is a compensation scheme. Not a regulator.

They have to check things thoroughly and there will be a lot of unknowns at this stage. Especially as some of the investments done by the firm were unregulated and do not get FSCS protection.

Many clients are facing huge losses - often a large percentage of their retirement investments.

I am always amazed why some people go off the mainstream with so much of their wealth.

collapse of Beaufort - how is it different to investment platforms we use

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