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Beaufort Securities – is client money at risk?

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Customers of Beaufort Securities can finally breathe a sigh of relief as almost all of them can now expect to be protected in full for the return of money and assets.

The UK’s Financial Services Compensation Scheme (FSCS) confirmed that all client money and assets were held with Beaufort Asset Clearing Services. Consequently, these will be safely returned to investors.

What happened?

In early March this year, stockbrokers Beaufort Securities Limited went into insolvency.

The collapse of the brokerage came after the FBI carried out an undercover operation. As a result, this investigation led to criminal charges due to alleged involvement in securities fraud and money laundering.

How much money is owed?

There is estimated to be approximately 17,000 retail clients and around 500 corporate investors. Customers were initially reported to be responsible for footing the £100 million bill. This was quoted by PwC to return approximately £550 million in assets to them.

Originally, the FSCS said they were aiming to reimburse only 2,700 of those investors. This was for the costs associated with the insolvency.

The backlash

Investors were deeply unhappy with the figure of £100 million proposed by PwC. This resulted in the accountancy firm almost halving its cost forecast. The amount was eventually reduced from £100 million to £55 million.

Fortunately for the firm’s individual customers, it now seems as though they will all be protected by the FSCS. As a result, their assets and cash will now be safely returned without a loss.

Retail customers costs for returning their assets will be capped at £10,000. They will be able to claim this back from the FSCS. This covers assets up to £50,000. Most noteworthy, 94% of the costs of insolvency are being covered by the FSCS.

Beaufort Securities mis-selling

Furthermore, some Beaufort Securities customers may also be eligible for additional compensation. This is if they were advised to buy investments, such as a self-invested personal pension (SIPP), that wasn’t inappropriate for their situation. Additionally, the investors do not have to have lost money in order to claim.

In the case of Beaufort Securities, an investor who was mis-sold a pension investment can make a second claim for poor investment advice. This is in addition to the claim for losses caused by Beaufort’s administration.

Do you have a SIPP with managed by Beaufort Securities and you believe it wasn’t suitable for your needs? Contact our legal experts to support you in getting the compensation you deserve.