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FSCS set to return cash over collapsed DFM

The Financial Services Compensation Scheme has said it should begin returning money to investors in collapsed discretionary fund manager Strand Capital as early as next month.

The London-based DFM had around 3,000 clients when it was put into special administration in May last year. The FSCS declared it in the default the same month, opening up compensation claims against the £86m in assets under management at Strand.

An administrators report details a host of failures in the run up to its collapse, including being unable to value the commission payments that would have been due, unidentified bank accounts within the firm, and a failure to have enough money to extend its professional indemnity insurance.

IFAs with money with the firm had to be contacted individually after administrators were unable to get a comprehensive list of client names and holdings from a director.

Administrators detail litany of failures at collapsed DFM

In January the lifeboat fund estimated that £6m would be due in compensation.

A further update today on the FSCS’ website says that the lifeboat fund “anticipates making the first payments during the course of April or May 2018” in respect of returning client cash and assets.

Last November, Money Marketing spoke with one of the key insolvency specialists at Strand’s administrator, Smith & Williamson, for an insight on how the process was progressing.

The FSCS says it is has worked extensively with Smith & Williamson on what arrangements for returning cash and assets to Strand’s customers should be in place.

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