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  • FIRST POST
    • Les8352
    • By Les8352 11th Mar 18, 1:37 PM
    • 4Posts
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    Les8352
    Beaufort securities in administration
    • #1
    • 11th Mar 18, 1:37 PM
    Beaufort securities in administration 11th Mar 18 at 1:37 PM
    I have a number of shares in an ISA with Beaufort Securities which has just been put into administration. Does anyone know what is likely to happen to my shares? Will I get them back?
Page 1
    • Alexland
    • By Alexland 11th Mar 18, 1:40 PM
    • 2,601 Posts
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    Alexland
    • #2
    • 11th Mar 18, 1:40 PM
    • #2
    • 11th Mar 18, 1:40 PM
    See below thread on this topic

    http://forums.moneysavingexpert.com/showthread.php?t=5808277&highlight=beaufort
    • xylophone
    • By xylophone 11th Mar 18, 4:08 PM
    • 25,599 Posts
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    xylophone
    • #3
    • 11th Mar 18, 4:08 PM
    • #3
    • 11th Mar 18, 4:08 PM
    https://www.which.co.uk/news/2018/03/beaufort-securities-goes-bust-what-are-your-rights/
    • dunstonh
    • By dunstonh 11th Mar 18, 4:21 PM
    • 93,048 Posts
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    dunstonh
    • #4
    • 11th Mar 18, 4:21 PM
    • #4
    • 11th Mar 18, 4:21 PM
    The risk of using non-mainstream high-risk investments is that they are more likely to fail. This style of investment should never form more than 5% of your portfolio. So, hopefully, your exposure is limited.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • steampowered
    • By steampowered 11th Mar 18, 6:39 PM
    • 2,598 Posts
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    steampowered
    • #5
    • 11th Mar 18, 6:39 PM
    • #5
    • 11th Mar 18, 6:39 PM
    If a company has gone into administration, that means it is not able to pay its debts.

    It is unfortunately very unlikely that shareholders will receive anything from the administration. Creditors get paid before shareholders.

    You should expect to lose your entire investment, unfortunately.
    • redux
    • By redux 11th Mar 18, 6:49 PM
    • 18,242 Posts
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    redux
    • #6
    • 11th Mar 18, 6:49 PM
    • #6
    • 11th Mar 18, 6:49 PM
    If a company has gone into administration, that means it is not able to pay its debts.

    It is unfortunately very unlikely that shareholders will receive anything from the administration. Creditors get paid before shareholders.

    You should expect to lose your entire investment, unfortunately.
    Originally posted by steampowered
    Specific information can be better than generalised comment.

    The thread linked in post 2 includes links to or mention of BBC and FT articles which include more informed comments by PwC, the administrators appointed to deal with this.

    They say they have identified 850M in cash and funds, more than they initially expected, and suggest that people will get substantial amounts back, though not quite all, and it may take a while.

    http://www.bbc.co.uk/news/business-43301342
    Last edited by redux; 11-03-2018 at 7:42 PM.
    • Malthusian
    • By Malthusian 11th Mar 18, 11:28 PM
    • 4,255 Posts
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    Malthusian
    • #7
    • 11th Mar 18, 11:28 PM
    • #7
    • 11th Mar 18, 11:28 PM
    You should expect to lose your entire investment, unfortunately.
    Originally posted by steampowered
    The OP said their shares were with Beaufort Securities, not in Beaufort Securities. Unless the problems at BS are even worse than feared, the OP's shares should still be there and they will get them back eventually. No need to scare them like that.
    • lozzy1965
    • By lozzy1965 12th Mar 18, 12:55 PM
    • 128 Posts
    • 79 Thanks
    lozzy1965
    • #8
    • 12th Mar 18, 12:55 PM
    • #8
    • 12th Mar 18, 12:55 PM
    So just to clarify - and excuse me being slow! - if you invest WITH a company (ie they hold YOUR funds/shares in a nominee account) the investment is YOURS still - not the companies, and is protected if the worst should happen?


    This is what I understood to be the case - having substantial amounts in a Dealing Account, an ISA and a SIPP. This is my retirement funding - so I hope it is safe!


    (I'm with another broker - but it could happen to any firm).
    • Alexland
    • By Alexland 12th Mar 18, 1:52 PM
    • 2,601 Posts
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    Alexland
    • #9
    • 12th Mar 18, 1:52 PM
    • #9
    • 12th Mar 18, 1:52 PM
    So just to clarify - and excuse me being slow! - if you invest WITH a company (ie they hold YOUR funds/shares in a nominee account) the investment is YOURS still - not the companies, and is protected if the worst should happen?


    This is what I understood to be the case - having substantial amounts in a Dealing Account, an ISA and a SIPP. This is my retirement funding - so I hope it is safe!


    (I'm with another broker - but it could happen to any firm).
    Originally posted by lozzy1965
    It really does depend on what you have invested in and if fraud occurs then you could be falling back on the 50k FSCS investment services protection if it applies. We split our investments across multiple platforms and fund managers to limit the loss if the worst was to happen. It costs a bit more in fees but it is worth it for the peace of mind.

    Alex
    • JohnRo
    • By JohnRo 12th Mar 18, 1:55 PM
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    JohnRo
    A nominee account held with a broker means you've nominated the broker to act as your agent in the marketplace. That means securities are in your name but held by the broker for trading purposes.

    The only problem with this arrangement is if the broker is being dishonest and committing fraud. A situation where the account you're being presented is a fiction and doesn't tally with the reality of what they're doing with your money and everyone else's.

    If they're regulated they should have arrangements that ringfence accounts belonging to the business from those belonging to their clients.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Col Jessop
    • By Col Jessop 28th Mar 18, 3:00 PM
    • 21 Posts
    • 7 Thanks
    Col Jessop
    Duplicate post on another Beaufort related thread:

    In a slightly different position from the originating poster. I just had an online sharedealing account with Beaufort. I actually contacted the FCA, FO and FSCS last year when the FCA put out a notice about them. All reassured me that my money was safe and that Beaufort were regulated. Beaufort lied that the issue was down to them revamping their IT system. It was enough reassurance from the protective bodies for me to leave the account live.
    Email through from PWC telling us about the insolvency enacted by the FCA. They gave a PWC helpline. It is actually answered by the pathological liars at Beaufort Securities. And they lied. It took quite a bit of effort to speak with PWC directly.
    It looks like there is still a reasonable chance that Beaufort do not hold enough shares to match the shares held in customer accounts. So it might not be quite as simple as them transferring the share to another broker. PWC will also be taking a share of whatever is salvagable. So even if all your shares are covered there will be a loss interms of PWCs costs for managing the insolvency.
    The Financial Ombudsman is powerless as Beaufort are insolvent and no longer regulated. Basically they can;t fine an insolvent company so won't take any new complaints.
    The FSCS still have no process in place and no information to provide to Beaufort / FCA's victims. I have conflicting information that the FSCS will notify the victims once they have information from the FCA / PWC; and that it is up to the victims to complete a claim form - the form is irrelevant to the current situation.
    The FCA are demonstrating their typical contempt towards the victims of Beaufort. No information in relation to what people should do other than call a helpline that has Beaufort staff pouring more lies onto an already flaming bonfire of customers cash.
    Basically, this looks like a rudderless shambles with the victims being offered no support / information until the FCA has covered its own backside. Why did the FCA have to be forced into action by a foreign country when the majority of Beaufort's customers are UK citizens? Why if they palnned to make Beaufort insolvent did they not have a process in place that would provide reassurance to the victims?
    I really feel for the victims who are potentially far more exposed financially than me by this. I am reading stories of hundreds and potentially thousands of people losing significant and perhaps all of their retirement funds. The FCA and FSCS really need to get their act together on this and start provide clear and consistent advice to the victims.
    I wouldn't bother raising compliants by telephone or wasting your time with the Beaufort helpline. best to raise you complaint by email / letter to the FCA / PWC / FSCS at the highest level. If you need email alises for c-level staff at these orgs drop me a PM and I will provide.
    • Murphy_The_Cat
    • By Murphy_The_Cat 28th Mar 18, 10:53 PM
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    Murphy_The_Cat
    . If you need email alises for c-level staff at these orgs drop me a PM and I will provide.
    Originally posted by Col Jessop
    What are c-level staff ?



    • eskbanker
    • By eskbanker 28th Mar 18, 11:53 PM
    • 7,446 Posts
    • 8,028 Thanks
    eskbanker
    What are c-level staff ?
    Originally posted by Murphy_The_Cat
    It normally refers to Chief, as in CEO, CFO, COO, etc, although other less complimentary meanings may have been intended in the banking sector over the last ten years
    • max11
    • By max11 2nd Jun 18, 12:10 PM
    • 205 Posts
    • 11 Thanks
    max11
    It really does depend on what you have invested in and if fraud occurs then you could be falling back on the 50k FSCS investment services protection if it applies. We split our investments across multiple platforms and fund managers to limit the loss if the worst was to happen. It costs a bit more in fees but it is worth it for the peace of mind.

    Alex
    Originally posted by Alexland
    Sorry guys, just to understand...as there has probably been some confusion in this post...
    (Apologies if this was discussed in other posts, but I have not found it!)

    The FSCS protects "50,000 per person per firm (Investments)"

    Therefore, if we use one or more stokebrokers (H-L and Fidelity or Beaufiort like the OP for example) and we hold different funds from different companies (HSBC, L&G, Ishares,Vanguard for instance), as long as the total amount with each of the companies is under 50k, then we should be protected if one of them goes burst.
    If a stokebroker goes burst, it should not really affect the customer (unless frauds) as the holdings are under his name.

    Are both assumptions correct?

    Thank you
    Max
    • dunstonh
    • By dunstonh 2nd Jun 18, 12:23 PM
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    dunstonh
    Therefore, if we use one or more stokebrokers (H-L and Fidelity or Beaufiort like the OP for example) and we hold different funds from different companies (HSBC, L&G, Ishares,Vanguard for instance), as long as the total amount with each of the companies is under 50k, then we should be protected if one of them goes burst.
    Remember Beaufort is different to holding investments on platform. They were a discretionary investment manager using unregulated investments. They were holding client money. Hence why PWC can charge against it. Different to a platform.

    However, yes, 50k per fund house per person and 50k per platform (irrespective of fund house) are the limits. However, that would be a level of paranoia that is really unnecessary.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Alexland
    • By Alexland 2nd Jun 18, 12:37 PM
    • 2,601 Posts
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    Alexland
    If a stokebroker goes burst, it should not really affect the customer (unless frauds) as the holdings are under his name.
    Originally posted by max11
    Many platforms now hold the shares in nominee accounts rather than directly registering them in the customer's name so it gets a bit complicated getting access to the assets if the company fails. If the company has been fradulant you may find the assets were never even purchased.
    • max11
    • By max11 2nd Jun 18, 12:41 PM
    • 205 Posts
    • 11 Thanks
    max11
    Thank you.
    Ha, I assumed Beauford was a fund manager company! so sadly going burst was a foreseeable event...

    However, yes, 50k per fund house per person and 50k per platform (irrespective of fund house) are the limits. However, that would be a level of paranoia that is really unnecessary.
    Originally posted by dunstonh
    sorry I did not get the part "50k per platform (irrespective of fund house)"...

    if I keep over 50k on each platform should still be covered as long as I am under 50k for each firm / fund house / fund manager?

    For example, I use two platforms (>50k on both) with different funds.
    Every few months I check that the total amount invested with each fund manager (fund house) is under 50k (between the 2 platforms)

    thank you
    • max11
    • By max11 2nd Jun 18, 12:58 PM
    • 205 Posts
    • 11 Thanks
    max11
    Many platforms now hold the shares in nominee accounts rather than directly registering them in the customer's name so it gets a bit complicated getting access to the assets if the company fails. If the company has been fradulant you may find the assets were never even purchased.
    Originally posted by Alexland
    thank you! hopefully it will not come to that with big platforms!
    If I am right, you were suggesting somewhere else having more platforms to spread the risk...
    • Alexland
    • By Alexland 2nd Jun 18, 1:23 PM
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    Alexland
    If I am right, you were suggesting somewhere else having more platforms to spread the risk...
    Originally posted by max11
    Yes that's an approach we take although we do not strictly limit the balances to the 50k limit as that would be impractical.
    • dunstonh
    • By dunstonh 2nd Jun 18, 1:30 PM
    • 93,048 Posts
    • 60,443 Thanks
    dunstonh
    sorry I did not get the part "50k per platform (irrespective of fund house)"...

    if I keep over 50k on each platform should still be covered as long as I am under 50k for each firm / fund house / fund manager?
    if the platform commits the fraud (say it never buys any of the investments it said), then you are only covered to 50k into total

    Examples.
    50,000 on platform is covered if platform commits fraud.
    80,000 on platform is covered to 50k if platform commits fraud.
    100,000 on platform split equally between two fund houses but a fraud is found on one of the funds and the fund house fails. That would see 50k unaffected as its a different fund house. And protection would be upto 50k on the failed fund. Protection on the platform is never activated as the platform is not involved.

    So, FSCS protection is multi-layered depending on where the issue is.

    If a fund house fails, then the funds should not be affected as the investments within the fund are not impacted by the failure of the fund house (unless the fund is investing big chunks of the money into the fund house itself - e.g. Lindsell Train)
    If the fund house was committing fraud but not within the actual funds then the funds are not affected.
    If the fund house was committing fraud and using fund money then that is when a similar scenario to beaufort comes into play.
    If the platform fails but the funds were purchased then you are unaffected (bar admin issues waiting for things to be resolved - most likely outcome is a buyer it sought)
    If the platform fails due to fraud but the actual investments were bought correctly then you are unaffected
    If the platform fails due to fraud and the investments were not bought, then you are covered to 50k
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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