Clients who paid fees as a high as 20 per cent to a failed wealth manager investigated by the regulator are a step closer to reclaiming their funds.
SVS Securities PLC entered special administration in August 2019 after the Financial Conduct Authority identified "serious concerns" about the way in which the wealth manager was operating.
The Financial Conduct Authority found some of the broker's 19,000 clients had paid fees and charges as high as 20 per cent of their total investment.
The regulator found the company was targeting IFAs to promote its model portfolios to clients after a defined benefit pension transfer or Sipp switch.
The FCA warned the proportion of illiquid and high-risk bonds in these model portfolios were unlikely to match the needs of clients.
An update published by administrators Leonard Curtis on Companies House over the weekend confirmed about £24m of client funds had been secured, with the majority of investors expected to reclaim their money.
In September the administrators advised the "quickest and most cost effective" way to return funds to SVS clients would be to transfer the company's assets to another broker, of which at one point there were more than 100 interested parties.
Now Leonard Curtis has confirmed a regulated broker has been selected and heads of terms agreed for the transfer of client funds.
The identity of the chosen broker is yet to be revealed but administrators expect client accounts to be transferred in the second or third quarter of 2020.
The administrators said: "We anticipate that, other than a very small number of exceptions, there will be a full return to clients in respect of custody assets and client money."
According to documents published on the Companies House website last year SVS also owed £770,781 to HM Revenue and Customs and £98,794 to its employees.
The FCA first intervened at the wealth manager when it conducted "urgent" supervisory work after receiving a tip-off about the assets in which the company was investing the money of its clients.
Following this the watchdog ordered SVS to cease all regulated activities and it collapsed into administration in August last year.
Meanwhile, last year SVS clients found themselves the target of fraudsters who wrote to investors claiming to be from Leonard Curtis.
rachel.mortimer@ft.com
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