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FSCS to pay back 2,700 clients of collapsed DFM Beaufort

FSCS Interior 480The Financial Services Compensation Scheme will automatically compensate hundreds of clients of a collapsed discretionary fund manager, but other investors will have to wait another five months to get their money back.

London-based Beaufort Securities has been investigated by both the FCA and US authorities.

An indictment from the US Department of Justice alleges that Beaufort recommended clients invest in art as part of money laundering, as well as attempting to manipulate stock prices.

Beaufort was placed into insolvency at the beginning of March after a successful application from the FCA to freeze the firm’s assets.

In an update published on its website today, the FSCS says 2,700 clients with claims of less than £2,000 will be compensated in full without having to submit an application form.

The compensation should be returned next month.

However, the majority of money will be returned to other investors in September at the earliest.

A distribution plan is being made with the administrators “as a matter of urgency”, the FSCS says.

The lifeboat fund has also reminded clients that the limit on claims for negligent advice is capped at £50,000, separated from another £50,000 to compensate any shortfall in assets held by Beaufort.

The FSCS will issue another update next month.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. This again proves the need to have DFM’s in a separate category from small advisory firms. Why on earth should we be expected to fund a firm that were force into insolvency by having been found guilty of committing criminal activities. This is now getting beyond a joke

  2. I agree with David. DFMs should be simply the fund managers with the client assets ringfenced as is the case with unit trusts and OEICs for example, if the manager goes bust then there is no impact on the client.

    This is entirely as a result of crime, those responsible should be held to account and assets seized, not simply dump the cost onto the FSCS and walk away. Give me five minutes in a locked room with these people.

  3. But DFMs and IFAs are so close in practical and regulatory terms. they have the same basic suitability rule for each transaction – COBS 9.2.1 R.

    The only difference between a dodgy IFA and a dodgy DFM is that the latter doesn’t need a sucker’s signature agreeing to each separate hideous mis-sale.

  4. […] dit le FSCS a réussi à offrir une compensation automatique à de nombreux clients cette […]

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