The FSCS said it has continued to work closely with the special administrators of Beaufort Asset, a subsidiary of discretionary fund manager Beaufort Securities, which entered insolvency in March.
It is working to return client money and assets as “soon as practically possible”.
For those with money and assets in excess of £2,000, a “realistic timeframe” for the return of their money will be September 2018 at the earliest, the FSCS said.
Cost to investors
In a letter to clients dated 12 April, joint administrator Russell Downs from PwC said that funding had been secured to ensure all critical operations at Beaufort Asset could be maintained “in order to facilitate the return of client money and assets”.
The letter advised that “client money and client assets were, as at the date of administration, substantially complete save for a very small number of isolated deficiencies”.
However, “in the absence of a surplus of funds within the firms’ segregated resources, and in accordance with governing legislation, relevant costs will need to be deducted from clients’ entitlements to client money and client assets”, Downs added.
“We believe the substantial majority of clients will recover their portfolios in full in due course.”
Around 700 clients with money and assets valued in excess of £150,000 “may experience a loss on their entitlements in excess of the FSCS’s £50,000 compensation limit”.
“Clients who do not fulfil the FSCS eligibility criteria will not be entitled to receive FSCS compensation and will, regrettably, face a loss on their client money and assets,” Downs wrote.
PwC is also working closely with the Financial Conduct Authority regarding the distributions, all of which will be be subject to the approval of the UK financial watchdog.
Poor investment advice
Downs also wrote that PwC is aware of some 700 claims against Beaufort Securities by clients for compensation in respect of various matters, including poor investment advice.
Clients who believe they have a claim for negligent advice are recommended to pursue compensation via the FSCS online portal.
Compensation is capped at £50,000 per investors and is separate from any claim that may have been made for money and assets.
Existing claims against Beaufort Securities being determined by the Financial Ombudsman Service are expected to be transferred to the FSCS.