I thought I flesh out the reasons for the petition a little bit more.PWC wanted to charge £100m over 4 years, and then brought it down to £55m over 2 years. According to me, this doesn't make any difference. It's the same as 100 * 2 / 4. And it's possible that the administration will drag on beyond 2 years. They just did this to quell all the bad press and anger from clients and creditors. The administration of Fyshe, Hoyton and Finney cost only £3m, and yet they had over £300m in assets!Beaufort had in fact correctly segregated all assets and money as per the ring-fencing rules.But the petition is not about Beaufort. The petition applies to all stock brokers and wealth management firms, I just used the Beaufort, Hartmann, Fyshe as examples.Every client is covered up-to £50,000 per broker by the FSCS.As per the law - Rule 135, the administrators take their fees from the clients shares / cash, and the FSCS reimburses each client for their loss up-to a maximum of £50,000.It might seem that this achieves the same result as the petition, but the petition goes beyond this. The petition in effect proposes to hold the FSCS responsible for the costs of administration.This will have several consequences:The FCA will work much harder to monitor brokers and protect customers as it knows it's on the hook if it doesn't.The way it works now is that the administrator has free rein over fees, and the only way clients can dispute the fees is by the client committee going to court which is a lengthy process and the chances of the administrators winning are high. As the FCA is the body that appoints the administrator in the first place, they have much more power to negotiate the fees and appoint an independent fee assessor to control the fees. This petition would force the FCA to do exactly that from the beginning instead of having the client committee fight the administrators in court.By having a direct settlement between the FSCS and the administrators, it avoids the need to liquidate shares (saving illiquid portfolios) and also avoids a tax charge on SIPPs when withdrawals are made to pay the fees.By making the FCA / FSCS responsible for the costs, it's highly likely that the cost to the FCA of an administration would be even much less than the current arrangement thereby saving the FCA a lot.For a broker that ring-fenced it's assets correctly (It's the FCA's job to make sure brokers do this), the time taken to return assets to clients in an administration would drastically reduce and not inconvenience clients. (You can't trade, sell or buy shares, or receive dividends during an administration)All brokers market accounts as ring-fenced, what is the meaning of ring-fencing if this circle can be broken to pay fees?I urge all to please sign the petition.
https://petition.parliament.uk/petitions/222801
