Around 11,500 former clients of wealth management firm Reyker Securities have been given hope they will soon get at least some of their assets back after FSCS intervention.
Reyker Securities was a fund custodian and wealth manager that held cash and assets on behalf of its clients.
The firm offered DFM and structured investment services and held client money of around £55m and custody assets of approximately £960m, some invested via ISAs and pension products.
City of London-based Reyker failed to find a buyer last year for its business and slumped into administration.
The failed firm was placed in Special Administration by the High Court following an application by its directors on 8 October 2019.
The FSCS says it will now meet the costs of the Special Administration on behalf of all individual customers of up to £85,000 per customer. FSCS protection is also available to most small companies.
The compensation body’s involvement should allow the majority of customers to transfer to new brokers without any deduction from their assets.
Jimmy Barber, chief operating officer at FSCS, said, “We want to thank Reyker clients for their patience. We hope it will be possible for the JSAs to set out more detailed timescales for the transfer of assets in the coming weeks.
“There have been several instances of third parties issuing fraudulent communications targeting Reyker’s clients affected by the Special Administration. We would ask Reyker clients to remain vigilant and exercise caution when dealing with correspondence regarding the Special Administration.”
The FSCS has been working closely with the Joint Special Administrators and their team at Smith & Williamson.
The JSAs will first be confirming the identity of the five nominated brokers. This will be followed by a Client Asset Return Statement to customers, which will detail all the assets to be returned to them by a series of transfers to new brokers.
A Distribution Plan setting out the basis for the transfers was approved by the High Court on 16 October.