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Article Contents (Estimated Reading Time - 3 mins 17 secs)

Summary

It appears that Brite South Africa (Brite SA) has sold/transferred their client bank to a new financial adviser/services firm, named 1.618 Financial services (1.618). This is a transfer of the existing servicing agreements and is not a sale of client funds, or anything along those lines.

The receivers are not privy to any contracts that have been exchanged, and are merely providing a summary of what they know. They are not providing any view on it, and their update is merely designed to help clarify some matters and answer some FAQ.

There are some basic updates they have provided, including:

  • They have not seen any contracts for the sale, nor has there been any contractual agreement made between the 1.618 and Brite Advisors;
  • They will not be providing any updates to 1.618, and will continue to communicate directly with the Trustees and Beneficiaries;
  • Not having a financial adviser will not stop you from receiving updates from the Receivers, as these are made directly to the Trustees and Beneficiaries, and not just the financial adviser;
  • Investment statements provided to Brite clients are not accurate, as they do not reconcile with actual client funds held, and any investment statements provided since the Receivership began can not be relied upon for accuracy;
  • You do not have to utilise 1.618 as your adviser firm, and are free to select another adviser, or continue without one, especially for the time being;
  • Client AUM is still fully under the Receivers control, and this sale/transfer has not done anything to change the custody or control of the funds. This transfer was purely for the servicing of Brite SA clients, as Brite SA will no longer continue as a going concern; and
  • No advisory fees will be deducted from investments by the receiver, as the Receivers do not consider the Court has given them the powers to permit advisory fees to be paid from client AUM.

Our Thoughts

We believe that the key takeaway for Brite SA clients is that they should not feel beholden to move to 1.618 and accept ongoing advice and other services from them, just because Brite SA has transferred your servicing on to them.

If you liked and trusted your adviser at Brite, and they have moved to 1.618, then perhaps staying with them is a good option, but we would certainly recommend you keep your options open and explore what other advisers have to offer.

In the grand scheme of things, this apparent transfer will not have much impact on Brite SA clients, unless they stay with 1.618 and their new/existing adviser assigned to them. There is no obligation to stay with 1.618.

We would also note that many previous Brite SA advisers have taken up positions at other firms, and already solicited their previous clients, so it is clear that not all advisers will be moving to 1.618, and that some clients would have also not followed over to 1.618 already.

What to do now

Again, nothing much has really changed with this announcement, even for those who were clients of Brite SA. Just because the relationship you had has been technically moved over to 1.618, does not mean you have to continue you on with them, and we would, in your shoes, take this as an opportunity to reassess your entire financial planning situation.

Our guidance is the exact same it has been since the start, which is to go through the advice process with several financial advisers, compare their advice/ongoing service, and then choose the one you want to work with going forward, and appoint them as your financial advisor on your existing investment.

That decision won’t be final, and you can always choose another adviser/route down the road, but it will mean you are as far along in the advice process as possible, and right at the front of the proverbial queue, once the funds are released back to the Pension/yourself, to move to another provider/platform.

If you have not done so already, please feel free to book in to speak with one of our advisers on the link below.

Author

Jonathan Laws

My journey at Cameron James has been exceptional. I am something of a sponge for knowledge, which has made me extremely well suited to the complexities and constantly evolving UK Pension Transfer system. This in-depth knowledge and experience of Final Salary Pension Transfers allows me to be at the very top of my game and protect my client’s best interests.

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