Financial Services Compensation Scheme 

FSCS may not accept Greyfriars claims

FSCS may not accept Greyfriars claims

It is unclear whether certain claims submitted by clients of collapsed wealth manager Greyfriars Asset Management will be accepted by the Financial Services Compensation Scheme (FSCS), the company's administrators have said.

In their six-month progress report published on Companies House earlier this month (June 7), Adam Stephens and Henry Shinners of Smith & Williamson stated due to ongoing discussions it was unclear whether certain claims against Greyfriars would be accepted by the FSCS.

As it stands, the FSCS has received 16 claims against Greyfriars totalling £1.1m. But so far there has been no agreement as to whether and how these claims will be processed.

For a claim to be eligible for compensation it has to be established in law that the company owes something to the creditors.

The FSCS stated in the report: "Although the FSCS is accepting claims against Greyfriars Asset Management, claims have not yet been passed to our claims processing teams for assessment.

"FSCS is continuing to work with a number of sources, including Smith & Williamson, to consider whether there are ‘protected claims’ against Greyfriars Asset Management.

"For this to happen we need to know that Greyfriars Asset Management owes a civil liability to customers that would enable them to sue the firm in court."

It added: "In every case we work as quickly as possible to try to establish whether there are ‘protected claims’ that would allow us to declare a firm in default. However, the circumstances where we can pay compensation are strictly governed by our rules."

Greyfriars Asset Management was a wealth management business which had seen its permissions restricted by the Financial Conduct Authority before becoming insolvent last year.

Mr Stephens and Mr Shinners were appointed as joint administrators of Greyfriars on October 23, following the firm’s application for insolvency.

Two days later, the administrators concluded the sale of Greyfriars’ self-invested personal pensions (Sipp) and small self-administered scheme (Sass) businesses to Hartley Pensions for £820,000.

The advisory arm of Greyfriars was sold to Insight Financial Associates for £440,000 in a deal that completed on October 16.

Apart from the divisions sold to Insight and Hartley, Greyfriars also provided discretionary fund management services.  But this division commenced a wind down in 2017 and is no longer active. 

The administrators said they anticipate they will be able to realise enough capital from the firm to pay a dividend to unsecure creditors.

amy.austin@ft.com

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