Client Segregated Cash

9 weeks ago by
Is the Client Segregated Cash account currently earning interest and if so, will this be added to clients entitlements on a pro rata basis when it is finally returned over 6 months after seizure?
Community: Beaufort Clients

1 Answer

9 weeks ago by
I don't know the answer to that directly, but I see no reason why PwC would have changed Beaufort's client segregated cash bank account. Did Beaufort Securities pay interest on cash balances? If they did, then I would expect that to continue. In the current low interest rate environment, accrued interest per account during the administration period won't be very significant  and I would expect it to be added to final client money, if interest is paid.

I would expect the final cash sum per client account to be as follows:

Cash at date of administration(a)+dividend income+interest income(b)-cash apportionment of administration costs(c)+FSCS compensation in respect of (c)(d)

Except for those 10 accounts with very large amounts of cash (d) will equal (c)

Whilst securities are anticipated to be returned in September, via broker transfer, I'm not sure when cash will be returned, as it is treated separately. Will seek clarification on this point.
I have had a response to my query from a member of the creditors' committee. He does not dispute my calculation method for the cash distribution. However, the mechanics of the cash distribution have not yet been determined and will be agreed at a future committee meeting, before the formal distribution plan is drafted, in July.

The committee's objective is that as much client cash as possible should be distributed as soon as possible. They are also cognisant of the need to preserve SIPP and ISA cash within their respective wrappers.
written 9 weeks ago by Mark Bentley  
Thanks for the info Mark.

I asked the question as I thought Pwc might have moved the cash to an interest bearing holding facility (Beaufort cash management accounts are nil interest).

I will assume that there can be no claims for loss of interest due to funds that cannot be withdrawn and invested elsewhere. Although a small loss compared with the situation we were looking at a week ago, it is still lost money that is relied upon.

The Which article highlights the other losses that clients may incur due to the delayed return of assets.

Thanks again for all your teams efforts.

written 9 weeks ago by Daniel Parr  
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