BFS Investments plc has been placed into administration. Questions and answers for investors are set out below:
- What has happened to BFS?
On Wednesday 1 February 2006 BFS's Board decided it had insufficient funds to meet investors' claims in relation to split capital investment trusts. The shareholders decided to seek a creditors' voluntary liquidation. Letters inviting creditors (including complainants as potential creditors) to a meeting on 10 February were sent on 1 February 2006 - What happens next?
Creditors attended a meeting on 10 February 2006 to appoint the liquidator. The liquidator will then proceed to wind the firm up. - When did BFS go into liquidation?
BFS went into liquidation on 1 February 2006 when the shareholders passed a winding up resolution. - Why did BFS go into liquidation?
BFS went into liquidation as a result of a number of claims in relation to split capital investment trusts (splits) which in total value exceeded its ability to meet its liabilities. - Who put BFS into liquidation?
Shareholders of BFS voted at a general meeting on 1 February 2006 to approve a resolution to wind the company up, placing the company into a creditors' voluntary liquidation.
The creditors met on 10 February 2006 to approve a proposal to seek voluntary winding up of the company. - Why did the FSA allow this to happen?
This is a decision for the company. The law requires a firm to seek liquidation if it does not have sufficient funds to meet its liabilities. - If I am a splits investor but did not vote at the creditors meeting, do I still have a claim against the company?
Yes, investors in BFS funds who believe they may have a claim against the company may also be creditors. Not voting at a creditors meeting does not rule you out of making a claim against the company, your advisor, or both. However, you will need to make a decision on whether you have a claim against BFS, your adviser, or both. - How do investors decide whether to make a claim against BFS, the adviser, or both?
You need to consider how you bought your investment with BFS, and what information you used to make your decision. Did you deal with BFS directly, or did you buy the investment through an intermediary? If you did deal with an intermediary, did the intermediary advise you to invest in BFS funds?
You may wish to consider taking legal or other professional advice on the options open to you. It may, for instance, be appropriate, depending on the circumstances, for you to register a claim with BFS (via the liquidator) as well as make a complaint against the adviser. - What if BFS cannot meet the claims against it? Would I lose all my investments with BFS?
If you have lodged a claim with the liquidator, this may be considered by the Financial Services Compensation Scheme (FSCS) once the firm is wound up. The FSCS has published relevant information for customers on its website. - What do I do now?
You retain the right to submit a claim to the liquidator. The FSA's website will post contact details of the liquidator when available. After the firm is wound up you will still be able to lodge a claim with the FSCS. The FSCS will publish relevant information for customers on its website. - What is the FSCS?
The FSCS is the UK's statutory fund of last resort for customers of financial services firms. This means that FSCS can pay compensation to consumers if a financial services firm is unable, or likely to be unable, to pay claims against it.
The FSCS is an independent body, set up under the Financial Services & Markets Act 2000 (FSMA). The service is free to consumers.
For claims against investment firms, the compensation available from the FSCS is limited to £48,000 per person. The FSCS can pay compensation only for financial loss. To qualify for compensation consumers need to be eligible according to the rules for the scheme. Further information about the FSCS is available on its website. - How do I contact the liquidators?
BFS has advised that liquidators were confirmed at a meeting of creditors on Friday, 10 February 2006. The current liquidator is:
Nick Wood of Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square,
London NW1 2EP
Tel: 0207 383 5100
- I was an investor in BFS products. What has happened to my investments?
Your investments are currently being managed by Premier Asset Management Plc after the sale of BFS's business to Premier in October 2005. Premier is based in Guildford. Please contact Premier for further information about your investments. Premier's contact details are as follows:
Mike Fenton
Divisional Director
Premier Asset Management Plc
Eastgate Court
High Street
Guildford
Surrey
GU1 3DE
Tel: 01296 390400
- I want to withdraw my money from Premier.
Investors are usually able to liquidate their investments or have title of the assets transferred into their own names. You will need to contact Premier to discuss this. - Why are my investments being managed by Premier?
BFS made at least two attempts to contact you by mail at the address on their files and placed an advertisement in a national newspaper about the sale and transfer of your investments to Premier. In the absence of any response from you, the FSA granted a waiver of our rules requiring your consent to transfer your assets. This is a common procedure used in most merger and acquisition situations where firms are unable to make contact with their clients. This is even more important in view of the fact that BFS is to go into liquidation. - I didn't consent to Premier managing my money and I don't want my money to be managed by Premier.
The waiver of our rules had effect for three months and this is now complete. During this time Premier continued to make efforts to contact you and request your consent to transfer and manage your money. If you have not responded to Premier within this time, your account will now remain with Premier as BFS is in liquidation. Investors were expected to respond or make contact with Premier to make the necessary arrangements regarding their investments.
You are strongly advised to take the appropriate financial and tax advice before moving or liquidating your investments. - What happens to my complaint against BFS which the Financial Ombudsman Service (FOS) is currently looking at?
The Financial Ombudsman Service will suspend its investigation into your complaint, as it is unable to assist where a firm is unable to pay claims. When the Financial Services Compensation Scheme is satisfied that it can deal with claims, it will tell the Financial Ombudsman Service who will pass your case straight to the Financial Services Compensation Scheme and write to tell you that has happened. The Financial Services Compensation Scheme will then contact you to explain how it can help. - How does the liquidation of BFS affect my claim with Fund Distribution Ltd (FDL)?
BFS was not one of the firms that entered into the 24 December 2004 joint settlement agreed with the FSA and has not contributed to the fund being distributed by FDL. Accordingly, the liquidation in itself will not create any new entitlement to claim from the settlement fund.
However, some investors who purchased "qualifying investments"* through BFS may have claims currently being considered by FDL. If this applies to you, the liquidation will not, in itself, affect your claim, but if you receive an offer from FDL you will need to consider very carefully whether you should accept the offer (which may extinguish part or all of any claim against BFS) or pursue a claim against BFS (in liquidation). Such a claim may then ultimately be considered by the FSCS as a claim for compensation once BFS is wound up. You are strongly advised to take the appropriate financial/legal advice in deciding whether to accept a claim from FDL.
* The list of qualifying investments is published on the FDL web site. - What is the status of the FSA's Enforcement investigations?
The Financial Services Authority does not, as a rule, confirm or deny that individual firms are under investigation and it does not comment on the progress of investigations. News articles on this website are accurate, to the best of our knowledge, only at the date of publication. If the information they contain changes, follow-up articles may be published.
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