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Troubled wealth firm hit with fresh client complaints

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Troubled wealth firm hit with fresh client complaints

The Financial Ombudsman Service (FOS) has upheld a claim against troubled wealth firm Beaufort Securities, as it continues to look into a ‘steady stream’ of cases against the company.

The business has been in the spotlight since December 2016, when it agreed to a restriction of its discretionary investment powers. The Financial Conduct Authority said the company could not carry out any regulated DFM service unless it received instructions from clients, IFAs or pension providers beforehand.

Since then, the FOS said it saw an increase in calls and enquiries about the issue and the company in particular.

A spokesperson said: ‘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.’ 

However, the spokesperson did not indicate how many cases there are.

In a recent decision, the ombudsman ordered Beaufort Securities to pay compensation to a client, ‘Mr M’, who claimed that the company mismanaged his portfolio by making investments that did not match his risk profile. He also said the firm did not provide the dividends that he needed.

Mr M’s total net worth was around £126,000, of which £85,000 was invested in a portfolio with Beaufort, starting from December 2014.

In late 2016, he said that he noticed his portfolio had been devalued to around £68,000 and that some of the investments were riskier than he wanted.

The compensation will be calculated by comparing the performance of the portfolio to the FTSE UK Private Investors Income Total Return index and the average rate from fixed rate bonds. Beaufort was asked to pay the difference between the fair value and the actual value of the investment.

In a separate complaint, a ‘Mr C’ claimed that Beaufort gave him bad advice to buy shares that lost him money and advised him to invest in shares it had a vested interest in.

However, the ombudsman decided that while Beaufort caused the client trouble and upset by failing to handle the complaint well, there was not sufficient evidence to uphold the complaint.

Beaufort declined to comment on the complaints.

Last year, Wealth Manager sister title New Model Adviser revealed that the wealth firm directed clients to use Legal Force for claims against their advisers. 

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