WealthTek Limited Liability Partnership - Case Update

The Joint Special Administrators of a Newcastle-based wealth management firm are anticipating a significant shortfall in returns to clients.

WealthTek Limited Liability Partnership was placed in special administration on 6 April on application by the FCA due to concerns related to the firm operating outside its regulatory permissions, the safeguarding of client assets, misleading information provided to clients, disclosure of information to the FCA and the misuse of client assets. Shane Crooks, Emma Sayers and Mark Shaw of BDO were appointed Joint Special Administrators.

Since their appointment, the Joint Special Administrators have, among other things, taken control of known estate and client assets, made any necessary redundancies, retained certain employees to assist them in their investigations and duties, commenced the client asset reconciliation, and secured funding to return client assets as soon as reasonably practicable.

The Joint Special Administrators’ investigations to date indicate that there could be a client asset shortfall of up to £81.4 million, comprised on a shortfall in custody assets (securities held on behalf of clients) of £71.7 million and a shortfall in client money (money received in accordance with the Client Money Rules of the FCA’s Client Assets Sourcebook) of £9.7 million.

The Joint Special Administrators are aware of the concern this will cause to clients and have indicated that they are working as quickly as possible and will provide further information on the level of potential shortfall and the distribution plan in due course.

The Joint Special Administrators’ proposals can be found HERE. They have been assisted by Norton Rose Fulbright.