Custody of client money and assets
The below sets out how Wealthtime Limited meets the rules prescribed by our regulator, the Financial Conduct Authority (FCA), in how it holds and protects client assets and cash in its custody.
OUR STRUCTURE
Wealthtime Limited
Wealthtime Limited is a privately owned company authorised and regulated by the Financial Conduct Authority (FCA).
Wealthtime Limited is responsible for the administration and day-to-day operation of the products we offer and acts as custodian for the majority of cash and assets held within our products. In its role as custodian, and as a regulated firm, Wealthtime Limited must adhere to certain FCA rules to protect client assets and money (these are known as the CASS rules).
Wealthtime Trustees Limited
Wealthtime Trustees Limited is a wholly owned subsidiary of Wealthtime Limited. It is a Nominee Company and is also Bare Trustee of the Wealthtime Self-Invested Personal Pension (SIPP).
As Bare Trustee of the Wealthtime SIPP scheme Wealthtime Trustees Limited is the legal owner of all cash and assets in the scheme but has delegated custodial responsibilities (with some exceptions explained below) to Wealthtime Limited so that most of the assets and cash held in the Wealthtime SIPP are protected under the CASS rules.
CASH AND ASSETS IN THE CUSTODY OF WEALTHTIME LIMITED
Our approach to holding client money
All client money in the custody of Wealthtime Limited is held with a bank (or approved credit institution) that has met our due diligence requirements, in pooled accounts which have been identified as holding Client Money and are covered by letters from the bank acknowledging that fact. The acknowledgement letter, in a format prescribed by the FCA sets out the legal terms that apply to the protection of the Client Money in the accounts and clearly segregates the money from Wealthtime Limited’s own funds.
Should Wealthtime Limited fail, all money held in the pooled Client Money accounts will be protected and legally ring-fenced from the creditors of Wealthtime Limited.
Our approach to holding client assets
For Wealthtime Classic’s ISA, General Investment Account (GIA) and Corporate GIA (which includes offshore bond providers investing as corporate clients) products, Wealthtime Trustees Limited is the legal owner, as nominee, of the assets in the custody of Wealthtime Limited. For the Wealthtime SIPP, Wealthtime Trustees Limited is the legal owner, as Bare Trustee, of all assets in the Wealthtime SIPP scheme.
Holding client assets in the name of Wealthtime Trustees Limited means that they are legally ring-fenced and distinct from the corporate assets of Wealthtime Limited and therefore unavailable to settle the liabilities of Wealthtime Limited should it fail.
Assets held in the name of Wealthtime Trustees Limited are pooled holdings (we operate a separate pool in each asset for our SIPP, ISA, GIA and Corporate GIA products), meaning each client’s individual entitlement is not separately identifiable via certificates or other registration documents.
WHAT HAPPENS IN THE EVENT OF WEALTHTIME LIMITED’S FAILURE?
Client money in the custody of Wealthtime Limited
Any claim by our clients in the event of Wealthtime Limited’s failure would be against the total balance on all of our pooled Client Money accounts. This means that the insolvency practitioner would determine the amount of money each client should be entitled to and will then proportionately distribute the total balance of the Client Money accounts to all clients with a valid claim. The amount of money distributed may or may not be equal to the cash balance displayed in each client’s product portfolios.
Client assets in the custody of Wealthtime Limited
In the event of the failure of Wealthtime Limited each client holding an asset registered in the name of Wealthtime Trustees Limited will have a claim against the relevant pooled holdings in that asset, alongside all the other clients holding that asset in the pool. This means that the insolvency practitioner would determine the number of units/shares each client should be entitled to and will then proportionately distribute the units/shares in the pool to all clients with a valid claim. In the event of any shortfall in the number of units/shares in the pool each client may receive a number of units/shares that are less than the holding displayed on the client’s product portfolio.
FSCS protection
Clients suffering financial loss as a result of the failure of Wealthtime Limited (for example due to a shortfall in the Client Money bank accounts and/or in a pooled asset holding) may be entitled to redress from the Financial Services Compensation Scheme (FSCS). The FSCS enables individuals and small businesses to claim for 100% of any loss up to £85,000.
Please be aware that clients investing with Wealthtime Limited via an Offshore Bond will not be protected under the FSCS.
WHAT HAPPENS IN THE EVENT OF WEALTHTIME TRUSTEES LIMITED’S FAILURE?
Wealthtime Trustees Limited is a non-trading, dormant company so it should not be possible for it to fail.
CASH AND ASSETS NOT IN THE CUSTODY OF WEALTHTIME LIMITED
As mentioned above, there are cases where cash or assets displayed in a Wealthtime Classic product portfolio may not be in the custody of Wealthtime Limited (for example where the client has requested that money in their pension should be paid into a deposit account with a third party UK bank) and therefore may not automatically be protected under the CASS rules.
Where a client’s portfolio contains cash or assets not held in the custody of Wealthtime Limited, those clients (and their advisers) are advised to check with the institution to determine how cash and/or assets it holds for the client are protected and what, if any, compensation schemes are available in the event that the institution fails.
Wealthtime Limited produces ‘Custody Statements’ every quarter for each client. Cash or assets not in our custody are clearly marked as ‘Not in the custody of Wealthtime Limited’. These custody statements are stored on each clients ‘Document Store’ (in our Online Service) and are available for clients and advisers to download and save at any time.
WHAT HAPPENS IF A BANK HOLDING CLIENT MONEY OR AN ASSET PROVIDER FAILS?
Failure of a bank holding Client Money
The FSCS can pay compensation of up to £85,000 to eligible depositors if a bank is unable to meet its financial obligations. The £85,000 limit relates to the combined amount in all the eligible depositor’s accounts with the bank (whether held with Wealthtime Limited or directly) including their share of any joint account.
Failure of asset provider
FCA authorised fund managers may be covered by the FSCS (up to £85,000 per fund manager for an eligible claimant) in the event that they become insolvent and a client experiences financial loss as a result of the firm’s failure. Unless they are authorised by the FCA, overseas fund managers are not covered by the FSCS but may be eligible for a similar compensation scheme offered by other countries.
Important information regarding protection and compensation schemes
FSCS protection for investments only applies to unit trusts and Open-Ended Investment Companies (OEICs) and does not extend to shares and related investments (e.g. Exchanged-Traded Funds).
Please be aware that clients investing with Wealthtime Classic via an Offshore Bond are unlikely to be eligible for FSCS protection (or a similar overseas schemes, where relevant) in the event that a fund manager or bank fails.
Wealthtime Classic strongly recommends that clients check with their selected product or investment provider to determine how their assets are protected and to determine the availability of any compensation schemes.
FURTHER INFORMATION
Financial Services Compensation Scheme (FSCS)
For further information about the scheme including the amounts covered and eligibility to claim please refer to the FSCS website at www.fscs.org.uk.
Financial Conduct Authority (FCA)
Further information about our regulator, the Financial Conduct Authority, can be found on its website at www.fca.org.uk.
The below sets out how Wealthtime Limited meets the rules prescribed by our regulator, the Financial Conduct Authority (FCA), in how it holds and protects client assets and cash in its custody.
OUR STRUCTURE
Wealthtime Limited
Wealthtime Limited is a privately owned company authorised and regulated by the Financial Conduct Authority (FCA).
Wealthtime Limited is responsible for the administration and day-to-day operation of the products we offer and acts as custodian for the majority of cash and assets held within our products. In its role as custodian, and as a regulated firm, Wealthtime Limited must adhere to certain FCA rules to protect client assets and money (these are known as the CASS rules).
Wealthtime Trustees Limited
Wealthtime Trustees Limited is a wholly owned subsidiary of Wealthtime Limited. It is a Nominee Company and is also Bare Trustee of the Wealthtime Self-Invested Personal Pension (SIPP).
As Bare Trustee of the Wealthtime SIPP scheme Wealthtime Trustees Limited is the legal owner of all cash and assets in the scheme but has delegated custodial responsibilities (with some exceptions explained below) to Wealthtime Limited so that most of the assets and cash held in the Wealthtime SIPP are protected under the CASS rules.
CASH AND ASSETS IN THE CUSTODY OF WEALTHTIME LIMITED
Our approach to holding client money
All client money in the custody of Wealthtime Limited is held with a bank (or approved credit institution) that has met our due diligence requirements, in pooled accounts which have been identified as holding Client Money and are covered by letters from the bank acknowledging that fact. The acknowledgement letter, in a format prescribed by the FCA sets out the legal terms that apply to the protection of the Client Money in the accounts and clearly segregates the money from Wealthtime Limited’s own funds.
Should Wealthtime Limited fail, all money held in the pooled Client Money accounts will be protected and legally ring-fenced from the creditors of Wealthtime Limited.
Our approach to holding client assets
For Wealthtime Classic’s ISA, General Investment Account (GIA) and Corporate GIA (which includes offshore bond providers investing as corporate clients) products, Wealthtime Trustees Limited is the legal owner, as nominee, of the assets in the custody of Wealthtime Limited. For the Wealthtime SIPP, Wealthtime Trustees Limited is the legal owner, as Bare Trustee, of all assets in the Wealthtime SIPP scheme.
Holding client assets in the name of Wealthtime Trustees Limited means that they are legally ring-fenced and distinct from the corporate assets of Wealthtime Limited and therefore unavailable to settle the liabilities of Wealthtime Limited should it fail.
Assets held in the name of Wealthtime Trustees Limited are pooled holdings (we operate a separate pool in each asset for our SIPP, ISA, GIA and Corporate GIA products), meaning each client’s individual entitlement is not separately identifiable via certificates or other registration documents.
WHAT HAPPENS IN THE EVENT OF WEALTHTIME LIMITED’S FAILURE?
Client money in the custody of Wealthtime Limited
Any claim by our clients in the event of Wealthtime Limited’s failure would be against the total balance on all of our pooled Client Money accounts. This means that the insolvency practitioner would determine the amount of money each client should be entitled to and will then proportionately distribute the total balance of the Client Money accounts to all clients with a valid claim. The amount of money distributed may or may not be equal to the cash balance displayed in each client’s product portfolios.
Client assets in the custody of Wealthtime Limited
In the event of the failure of Wealthtime Limited each client holding an asset registered in the name of Wealthtime Trustees Limited will have a claim against the relevant pooled holdings in that asset, alongside all the other clients holding that asset in the pool. This means that the insolvency practitioner would determine the number of units/shares each client should be entitled to and will then proportionately distribute the units/shares in the pool to all clients with a valid claim. In the event of any shortfall in the number of units/shares in the pool each client may receive a number of units/shares that are less than the holding displayed on the client’s product portfolio.
FSCS protection
Clients suffering financial loss as a result of the failure of Wealthtime Limited (for example due to a shortfall in the Client Money bank accounts and/or in a pooled asset holding) may be entitled to redress from the Financial Services Compensation Scheme (FSCS). The FSCS enables individuals and small businesses to claim for 100% of any loss up to £85,000.
Please be aware that clients investing with Wealthtime Limited via an Offshore Bond will not be protected under the FSCS.
WHAT HAPPENS IN THE EVENT OF WEALTHTIME TRUSTEES LIMITED’S FAILURE?
Wealthtime Trustees Limited is a non-trading, dormant company so it should not be possible for it to fail.
CASH AND ASSETS NOT IN THE CUSTODY OF WEALTHTIME LIMITED
As mentioned above, there are cases where cash or assets displayed in a Wealthtime Classic product portfolio may not be in the custody of Wealthtime Limited (for example where the client has requested that money in their pension should be paid into a deposit account with a third party UK bank) and therefore may not automatically be protected under the CASS rules.
Where a client’s portfolio contains cash or assets not held in the custody of Wealthtime Limited, those clients (and their advisers) are advised to check with the institution to determine how cash and/or assets it holds for the client are protected and what, if any, compensation schemes are available in the event that the institution fails.
Wealthtime Limited produces ‘Custody Statements’ every quarter for each client. Cash or assets not in our custody are clearly marked as ‘Not in the custody of Wealthtime Limited’. These custody statements are stored on each clients ‘Document Store’ (in our Online Service) and are available for clients and advisers to download and save at any time.
WHAT HAPPENS IF A BANK HOLDING CLIENT MONEY OR AN ASSET PROVIDER FAILS?
Failure of a bank holding Client Money
The FSCS can pay compensation of up to £85,000 to eligible depositors if a bank is unable to meet its financial obligations. The £85,000 limit relates to the combined amount in all the eligible depositor’s accounts with the bank (whether held with Wealthtime Limited or directly) including their share of any joint account.
Failure of asset provider
FCA authorised fund managers may be covered by the FSCS (up to £85,000 per fund manager for an eligible claimant) in the event that they become insolvent and a client experiences financial loss as a result of the firm’s failure. Unless they are authorised by the FCA, overseas fund managers are not covered by the FSCS but may be eligible for a similar compensation scheme offered by other countries.
Important information regarding protection and compensation schemes
FSCS protection for investments only applies to unit trusts and Open-Ended Investment Companies (OEICs) and does not extend to shares and related investments (e.g. Exchanged-Traded Funds).
Please be aware that clients investing with Wealthtime Classic via an Offshore Bond are unlikely to be eligible for FSCS protection (or a similar overseas schemes, where relevant) in the event that a fund manager or bank fails.
Wealthtime Classic strongly recommends that clients check with their selected product or investment provider to determine how their assets are protected and to determine the availability of any compensation schemes.
FURTHER INFORMATION
Financial Services Compensation Scheme (FSCS)
For further information about the scheme including the amounts covered and eligibility to claim please refer to the FSCS website at www.fscs.org.uk.
Financial Conduct Authority (FCA)
Further information about our regulator, the Financial Conduct Authority, can be found on its website at www.fca.org.uk.
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