The Financial Services Compensation Scheme (FSCS) announced on Wednesday (23 May), that it has paid the money to 796 Strand Capital customers over the last two weeks.
About 3,000 clients were hit when the London-based firm went into administration.
“The recent payments were in respect of client cash only. As the relevant investments were held in self invested personalised pensions (Sipps), the compensation payments were made direct to customers’ Sipps,” an FSCS spokesperson said.
Customers who held cash through other Sipp providers, or directly with Strand, will receive compensation payments over the next few weeks.
“Since the reconciliation of client cash has not yet been completed, and shortfalls have yet to be finalised, FSCS has stepped in and has compensated in relation to the whole cash balance held by clients, up to the £50,000 limit,” FSCS said.
Work will continue with the Joint Specialist Administrators (JSAs) of Strand so return assets back to clients as soon as possible.
“We anticipate that a conclusion to this part of the process will require JSAs to seek court approval of a distribution plan, which is likely to be a number of months away,” FSCS said.
No longer solvent
Strand Capital, owned by Optima Worldwide since 2014, formally entered the Special Administration Regime (SAR) insolvency proceedings on 17 May.
Having determined that is was no longer solvent, Strand made a court application to formally initiate insolvency proceedings under SAR.
In its last available results filed with Companies House in February, Strand registered a loss of £204,497 for the period between 1 April 2015 to 30 June 2016.
The discretionary manager’s assets stood at £86m and it had tie-ups with more than 10 IFA firms.