Financial Services Compensation Scheme  

FSCS to payout over British Steel IFA, Beaufort and 9 others

FSCS to payout over British Steel IFA, Beaufort and 9 others

Collapsed discretionary fund manager Beaufort Securities and advice firm Active Wealth, which has been criticised over its dealing with British Steel pensioners, are among the 11 firms declared in default by the Financial Services Compensation Scheme (FSCS) in March.

The declaration means clients who incurred losses as a result of dealing with them may now be eligible to bring a claim of up to £50,000 on their failed investment.

BSL was declared in default by the FSCS on 19 March after the lifeboat scheme deemed it could no longer withstand potential and pending claims against it.

The stockbroker and discretionary fund manager (DFM) and its subsidiary Beaufort Asset Clearing Services were placed into insolvency in early March after an application by the Financial Conduct Authority.

BSL had been charged with securities fraud in the United States. 

The FCA imposed requirements on the firms to cease all regulatory activity and not to dispose of any firm or client assets without the regulator's consent.

Active Wealth meanwhile, was a major player in the debacle ensuing the British Steel Pension Scheme restructure.

The firm gave advice to steelworkers to transfer out of their defined benefit schemes until it was asked by the Financial Conduct Authority (FCA) to stop carrying out the business.

By Wednesday last week (11 April) the FSCS had received 34 claims about bad advice against Active Wealth.

But the firm had advised as many as 300 BSPS clients, of which 64 proceeded to transfer out of the scheme into alternative pension arrangements without taking further advice.

FTAdviser learnt some solicitors offering to help steelworkers bring FSCS claims against Active Wealth are asking for up to a third of the redress payout in fees.

Other firms declared in default include London-based Mortgage Partner Services Limited, trading as Blevins Franks Mortgage Services; Hampshire-based Ebullio Capital Management; as well as Hertfordshire’s Regent Wealth.

Financial services firms located in the North include Cheshire-based Total Financial Control and Yorkshire-based Alan Driver Financial Services and Approved Financial Solutions.

Alex Kuczynski, director of corporate affairs at the FSCS, said: “FSCS steps in to protect consumers around the UK when authorised financial services firms go bust. 

“We want anyone who believes they may be owed money as a result of their dealings with any of these firms to get in touch as we may be able to help you.”