Nexus Independent Financial Advisers - Case Update

The joint administrators of Nexus Independent Financial Advisers have provided an update on their efforts to collect the outstanding balance owing on their sale of the firm, as well as a bankruptcy order made against the firm’s director for an overdrawn director loan account.

Nicola Layland and Carl Faulds of Leonard Curtis were appointed as joint administrators of the Portsmouth-based finance firm and connected company Nexus Investment Managers on 13 February 2023, following an FCA investigation into the conduct of the firm. At the time, the FCA said that it had very serious concerns that the firm’s sole director may have withdrawn client funds totaling over £2 million for her own personal use.

The joint administrators were put into an unexpected situation when the FCA issued a notice requiring all regulated activity to cease, which meant they couldn’t trade within the administration and had to shift their strategy to retaining staff whilst a sale process was undertaken. The FCA notice also imposed somewhat onerous restrictions on the administrators’ use of the firm’s funds, with FCA consent required for every expense of the administration.

The joint administrators retained Hilco Global, specialist agents with prior experience dealing with FCA regulated companies, to assist with the marketing and sale. Four offers were ultimately received and, approximately six weeks after their appointment, and with the consent of the FCA, the joint administrators completed a sale to Vintage Wealth Management on 9 March 2023.

The consideration for the sale was approximately £270,000, of which approximately £190,000 was paid on completion. The remaining approximately £80,000, which was due on 22 June 2023, still hasn’t been paid. Vintage Wealth takes the position that it is entitled to withhold this payment, but the joint administrators consider that the full balance is payable and should not be subject to set off or counterclaim. As a result, the joint administrators and their solicitors Moore Barlow have commenced recovery steps.

The joint administrators have also continued to diligently pursue the sole director for an overdrawn director loan account. After the director failed to respond to correspondence from the joint administrators and their solicitors Paris Smith, a statutory demand was issued, and a bankruptcy order was eventually granted. At this stage, it is uncertain whether any of the debt will be recovered through the bankruptcy.

The administrators have been assisted by Moore Barlow and Paris Smith (legal) and Hilco Global (agents). Their most recent report can be found HERE.