Brokers and investment platforms have admitted they are powerless to prevent customer funds being tapped in the event of an insolvency, after a brokerage collapsed with huge ramifications for investors.
Some clients of Beaufort Securities, which was closed by Financial Conduct Authority in March, have been told they will have to foot the bill for costly insolvency proceedings being carried out by PwC, the professional services group.
The move prompted anger among private investors after they learnt that funds in ringfenced pensions and investment accounts could be raided if their broker were to fall into insolvency.
Brokers said the reminder underlines the importance of clients doing due diligence on providers and making sur…
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