Administrators for a wealth management company which was found to be charging investors as much as 20 per cent have warned fraudsters could be targeting its clients.
SVS Securities PLC entered special administration earlier this month after the Financial Conduct Authority identified "serious concerns" about the way in which the business was operating and was forced to take "urgent" supervisory work.
The regulator found the firm was targeting IFAs to promote its model portfolios to clients after a defined benefit pension transfer or self-invested personal pension switch and in some cases was charging clients fees of 20 per cent of their total investment.
Now clients of SVS have been warned a fraudulent letter is circulating claiming to be from the company's special administrators.
At the beginning of August a court appointed Leonard Curtis as administrators of SVS and in a statement issued yesterday (August 21) the company warned SVS clients had received a letter on August 19, 2019, allegedly signed by Daniel Booth of Leonard Curtis.
The administrators said: "The letter purports to be from Leonard Curtis. We can confirm that this letter has not been issued by Leonard Curtis.
"For clarification this letter should be ignore and is misrepresentative."
Leonard Curtis said it would provide a further update in due course and due to the volume of enquiries it was receiving about SVS would not be able to respond to individual emails.
The FCA has previously confirmed a whole or part sale of SVS was being considered as part of the administration process.
In a supervisory notice published on its website earlier this month the FCA warned the high fees it found being charged by SVS were partially the result of conflicts of interest at the company.
The FCA’s supervision team found emails, sent between 2016 and the present date, showing SVS worked closely with third parties to help "generate and sustain" demand for the investment products it offered.
In particular the third parties included professional advisers, bond issuers and product providers and the investment products SVS aimed to push included its DFM model portfolios.
The regulator said SVS did so "without apparent regard" for the investment needs of customers, resulting in high fees and charges which it warned had “negatively impacted” clients.
Urgent supervisory work by the financial regulator followed a tip-off about the assets in which SVS was investing client money, often following pension transfers, with the watchdog consequently instructing the wealth manager to cease all regulated activities.
rachel.mortimer@ft.com
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