FAQ: Pershing Migration and Legal Entity Change

Change in the custody arrangements used to hold your assets

As your agent we are planning to change the custodian used to hold your assets, moving from Pershing Securities Limited (PSL) to working with our associated group business, Evelyn Partners Investment Services Limited. Evelyn Partners Investment Services Limited will also provide ancillary services associated with holding of your assets e.g. settlement and deal processing. Evelyn Partners Investment Services Limited is part of the Evelyn Partners Group.

Why are we moving from Pershing to Evelyn Partners Investment Services Limited? 

The merger of the companies formerly known as Tilney and Smith & Williamson has created a wealth manager with Assets Under Management (AUM) in excess of £55bn. This gives us the scale required to provide these services directly to our clients, in a manner which is consistent with the approach taken by the former Smith & Williamson Group and other leading industry peers for their wealth management clients, and in addition, brings opportunities:

• As we will now own internally all aspects of the service we deliver to you, we will be able to prioritise future enhancements to our service that are relevant to you. For example, through Evelyn Partners Investment Services Limited we have the ability to support Lifetime ISAs, which has not been possible via Pershing.
• Manage the costs of developing our custody offering, taking advantage of the scale and expertise across the group.
• Control and apply our risk management standards, such as in the selection of underlying banking counterparties.
• Reduce our carbon footprint. For example, the quarterly paper-based custody statements you currently receive from Pershing will cease and we will have the ability to incorporate custody statements into our enhanced quarterly client valuations. These are also made available to you through our secure client portal, thereby reducing the volume of paper we consume.
• Deliver improved administration.  For example, where you may be looking to consolidate assets held outside of the Evelyn Partners group then we will be able to support transfers of those assets on a more timely basis, as we will not need to manage this through a third party (Pershing) which is the case at present.
• Leverage existing Evelyn Partners Investment Services Limited relationships for an enhanced product set – for example we are able to provide lending facilities with third party banks secured against assets held in custody (subject to meeting the lending criteria of the lending bank).

Is the level of client’s assets protection changing?

• There is no change from the current level of protection that eligible claimants are currently afforded under the Financial Services Compensation Scheme. The key change is that the nominee company going forward will either be controlled by Evelyn Partners Investment Services Limited or by a sub-custodian it has appointed rather than Pershing. Our team of experienced and qualified professionals will continue to provide oversight of our controls and procedures, to ensure we meet the stringent requirements set by the FCA’s CASS (Client Assets Sourcebook) rules. More specifically:
• Client money is segregated by regulation. The group and all subsidiary FCA regulated companies maintain a significant amount of headroom over their minimum capital requirements. Every year the Evelyn Partners group’s external CASS auditors form an independent opinion on our level of compliance with the FCA’s CASS regulations.
• As currently with Pershing, client assets (stock and cash) will continue to be held in ‘trust’. The client continues to be the beneficiary holder of the stock which will either be held by Evelyn Partners nominee (Unit Trusts, UK Equities or UK Government Bonds) or by our appointed sub custodian RBC (International securities).
• Uninvested cash is held in overnight deposit accounts across up to 10 financial institutions to ensure robust counterparty diversification. Balances are constantly monitored to ensure there is sufficient liquidity to meet ongoing requirements.
• Evelyn Partners complies with FCA rules which require segregation of client money and firm assets. In the very unlikely scenario of insolvency, client assets will continue to be ring fenced. The rules and procedures for insolvency are the same for Evelyn Partners Investment Services Limited and Pershing - and clients receive the same protection. As Evelyn Partners Investment Services Limited is a smaller and less complex business, assets would be redistributed to alternative custodians much faster if insolvency occurs.
• Evelyn Partners Investment Services Limited has the same level of regulatory protection as Pershing and diversification of cash held with up to 10 large financial institutions. Direct access to a dedicated custody team will improve the level of service e.g. faster transfers and new products like LISA.
• The client records will be held on Alpha, which integrates industry leading technology platforms used by over 150 other financial institutions to manage over £3.6tn assets. In the last year, we have generated thousands of tax packs and client valuations.
• Our award-winning in-house dealing capability setup since 1997 will execute trades using industry standard technology which in the last year has processed over 119k trades.
• Our combined group-wide Operations leaders have over 25 years of experience individually with expertise of running custody operations within Evelyn Partners since 2006. We are currently managing custody operations for over 30k clients and £26bn AUM.
• The transfer is a migration of client data records and re-registration of assets from Pershing’s Nominee to Evelyn Partners’s Nominee. The migration is rehearsed multiple times and we have already successfully transferred and re-registered over 17k clients with £11.5bn AUM.

What changes will I see as a result of the migration?

• The paper-based Pershing custody statement you currently receive will be incorporated into one single and enhanced quarterly valuation statement.
• If you actively subscribe to an ISA, then the account holder will be asked to sign a new Evelyn Partners Investment Services Limited subscription form to support future contributions. Subscriptions prior to migration will be processed using the existing process and forms, subscriptions after migration will require the new form we have included within the recent communication. This is a one-time event, on the assumption you contribute each year.
• Some of the confirmations we may occasionally send you will look a little different, but all the content remains unchanged. This will only apply to certain transaction types such as foreign exchange and cash movements.
• You will be issued new account numbers and money transfer instructions closer to the time when the described changes take effect. We will send you simple instructions on how to use them at the same time as the new account numbers are sent. Your usual Evelyn Partners representative will be available to help if you require any assistance. Further details will follow.

Will there be any interruption to dealing, settlement, or other services over migration implementation?

• You should not experience any interruption to the investment services we provide you. Your usual Evelyn Partners Representative will however be available for you should you have any questions or, if you experience any unexpected changes to our services or support.

What will happen to any securities I hold that cannot be moved from Pershing?

• In the rare circumstances that your portfolio currently holds legacy securities that cannot be re-registered, they will be retained at Pershing until such time as there is a change in liquidity or nil value is confirmed, and the tax status can be updated, and asset transferred or written down to zero. This process does not represent a change from the existing process, and you will be informed of any changes or elections pertaining to these assets as and when they become available. These positions will not reflect on your Evelyn Partners valuations but will be reported to you separately on Pershing custody statements, as they cannot be migrated to Evelyn Partners Investment Services Limited.

Change in the firm that provides you with your investment management services

The firm that provides you with your investment management services will in some cases change to Evelyn Partners Investment Management Services Limited. Clients that are already receiving their investment management services from Evelyn Partners Investment Management Services Limited will not be impacted by this change.

Why is the firm providing my investment management changing to Evelyn Partners Investment Management Services Limited?

• This change reflects the growth of the Group over the last few years and an opportunity to reduce the number of legal entities we have registered with the FCA. This does not reflect a change in service or mandate. Simplification of our structure allows us to reallocate resources to improving our products and services, under a simplified legal structure.

Will my usual Evelyn Partners representative change?

No, you will continue to be serviced by the same representatives.

What will change as a result of the entity change?

• A new set of Terms & Conditions along with a summary of changes to those terms, has been provided to you for your review. While this does not represent any changes to the products or services we provide, you can address any questions or concerns you may have with your usual Evelyn Partners representative.

Will the investment options including international stocks change?

• There will be no reduction in the investment options and markets that we have at our disposal. In fact, we expect that the suite of investment options that will be accessible to you will continue to grow, as our combined team of investment professionals work to find the best products to meet your investment objectives.