FCA steps in after SVS clients face delays at new broker

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FCA steps in after SVS clients face delays at new broker

Clients of failed discretionary fund manager SVS Securities have been assured they can now access their funds after the regulator was forced to step in following months of delays.

Broker ITI Capital had promised clients, many of whom had transferred out of defined benefit pensions, they would be able to begin accessing their money from July 24, after it bought the client book of SVS which had fallen into administration last year. 

But the clients faced delays in accessing their funds well into September, despite ITI claiming the issue had been resolved in August, leading the Financial Conduct Authority to step in to monitor the situation.

A spokesman for ITI Capital has now told FTAdviser client registration are "running smoothly" after "initial challenges with the onboarding process". 

ITI Capital said: "Our phone systems are fully staffed, any new email questions are being dealt with and all customers should have received clear communication either via email or in the post about the status of their account, balance and necessary log-in credentials.

"Any client wishing to place a trade, regardless of where they are in the registration process, can do so by calling us."

SVS Securities fell into special administration last year after the Financial Conduct Authority identified "serious concerns" about the way the business was operating, with the regulator warning some clients were paying fees and charges as high as 20 per cent of their total investment

ITI bought the SVS client book following a sales process led by the failed firm's administrators, Leonard Curtis, and which at one time saw it up against more than 100 brokers also interested in the purchase. 

When SVS investors transferred to ITI the majority of the costs were covered by the Financial Services Compensation Scheme, avoiding a shortfall in client funds.

ITI Capital's takeover was expected to unlock £240m in funds for the 18,000 investors transferring across to the new broker. 

ITI Capital blamed the initial delays on "teething issues" exacerbated by the coronavirus outbreak.

An FCA spokesperson told FTAdviser the regulator was aware a number of former SVS clients had experienced difficulties accessing their assets with ITI and in attempting to transfer their assets to an alternative provider.

The spokesperson said: "This is a consequence of IT system failings and errors which ITI has been working to resolve.

"We have held regular discussions with ITI on how it has sought to address these outstanding issues and delays as soon as possible, including responding appropriately to clients and taking steps to ensure they do not suffer financial detriment as a consequence of ITI’s actions.

"As a result of these discussions, ITI has taken a number of steps to improve its ability to provide the services its clients expect, but we recognise that further progress is still required."

The spokesperson said the FCA was keeping the situation with ITI Capital under "close review". 

Several former SVS clients had told FTAdviser they have struggled to contact ITI Capital over the phone or via email in recent months. 

The ITI Capital spokesperson added: "While we are experiencing a slight backlog with processing client transfers to external brokers, we have allocated additional resources to this area so that we are caught up.

"We would like to thank clients for their patience during the previous few weeks, and encourage any customer with questions to speak to our team who will be only too happy to help."

An online forum for former SVS clients shows a number of clients are planning to escalate the issues experienced under ITI Capital to the Financial Ombudsman Service.

FTAdviser understands the ombudsman has received about 10 complaints about ITI Capital, but these are not necessarily in relation to SVS clients.


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