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What to do if you were a client of WealthTek LLP
As the administration process is still ongoing, the Financial Services Compensation Service (FSCS) has outlined on its website that:
“FSCS is working closely with the Joint Special Administrators to establish whether FSCS compensation will be available for customers. We remain closed to customer claims currently.”
The FSCS is a Government-backed lifeboat scheme for customers of failed, regulated financial firms such as WealthTek LLP.
We recently reported that City watchdog, the Financial Conduct Authority (FCA), had shut down a Tyneside-based wealth management partnership, WealthTek LLP, after uncovering “serious regulatory and operational issues” with the firm.
The FCA has since frozen the assets of WealthTek LLP’s principal partner, John Dance, and launched a criminal investigation after special administrators BDO – brought in to deal with the administration – found a potential shortfall of £81.4 million in client assets.
WealthTek LLP closure
In April 2023, it was announced that Tyneside-based wealth management partnership WealthTek LLP had been forced to cease operations by the Financial Conduct Authority (FCA), the UK’s regulatory body for financial services and markets. The firm also traded as Vertem Asset Management and Malloch Melville.
The FCA was forced to take action against WealthTek LLP “in order to protect WealthTek’s clients following the FCA becoming aware of serious regulatory and operational concerns relating to the firm”.
Joint Special Administrators from licenced insolvency firm BDO LLP were brought in to oversee the closed firm’s affairs and to investigate the FCA’s concerns of:
- WealthTek operating outside of its regulatory permissions.
- The safeguarding of client assets.
- Misleading information provided to clients.
- Disclosure of information to the FCA.
- The misuse of client assets.
The FCA has also opened a criminal investigation into WealthTek LLP’s owner, John Dance, over potential money breaches, fraud, and money laundering.
In late May 2023, the special administrators published their report and revealed that the firm had “a client asset and money shortfall of over £80 million”. These funds are said to be likely due to unidentified custodians, missing custody assets or inaccurate records.
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Scam warning
If you are a current or former client of WealthTek, Vertem Asset Management, or Malloch Melville, it is also important to be aware of potential scams that may arise due to the administration process.
Neither the administrators BDO LLP nor WealthTek LLP will ask clients for bank details or other personal information over the phone, so all cold calls and conversations should be treated with suspicion and reported directly to the administrators.
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TLW Solicitors’ view on the FCA decision
“We appreciate that WealthTek LLP clients are likely to be concerned about their money following the revelation that there is an £80 million shortfall. While the FSCS is not currently open to claims relating to the firm, as investigations are ongoing, we are keeping a close eye on the case as it unfolds and anticipate that some form of compensation scheme will be available to clients in the future.
If there are any current or former clients of WealthTek, or any of the other firms in the partnership, who believe that they have lost money as a result of the firms’ operations, I would encourage them to get in touch with us for a no-obligation chat as we may be able to help.”
Get in touch
If you are concerned about your, a friend or a loved one’s WealthTek investment, then please get in touch with TLW Solicitors to discuss your options.
