The Financial Conduct Authority (FCA) has declared troubled wealth firm Beaufort Securities Limited (BSL) and sister company Beaufort Asset Clearing Services Limited (BACSL) insolvent.
The high court has appointed Russell Downs, Douglas Nigel Rackham and Dan Yoram Schwarzmann of PricewaterhouseCoopers (PwC) as joint administrators of BSL and special administrators of BACSL after an urgent application by the financial regulator.
‘The FCA took this action following an assessment of the financial positions of BSL and BACSL which led the FCA to believe that both firms are insolvent,’ a statement read.
‘The FCA also considers it necessary for insolvency practitioners to take over the running of the firms in order to protect assets from dissipation and protect the customers of both firms.’
The regulator has also used it powers to prevent the firms from conducting any regulatory activity, or dispose of any firm or client assets without its consent.
All clients will be contacted by the administrators in due course.
Beaufort Securities has been in the spotlight since December 2016 when the FCA restricted its discretionary powers.
Last October it emerged Beaufort Securities had written to its clients encouraging them to claim against their IFAs over its own investment products.
The firm directed clients to use claims firm Legal Force to see if they have grounds for a compensation claim against their adviser for recommending they invest in Beaufort. At least 10 advisers are known to have used the investment firm.
Earlier this year Wealth Manager learned that the Financial Ombudsman Service (FOS) has upheld a claim against Beaufort Securities, as it continues to look into a ‘steady stream’ of cases against the company.
A spokesperson told Wealth Manager at the time: ‘We have been receiving a steady stream of cases over the last 10 months or so that we are in the process of looking into.’ They did not indicate how many cases there exactly were.
The news comes after Kent-based wealth firm Full Circle Asset Management fell into administration in January after a court order to pay out damages to a client.