The FCA has censured WealthTek’s custodian and agreed the firm will pay £31.7m to WealthTek clients for weak financial crime controls.
The FCA says it has now secured over £57m in total for WealthTek clients in a year, with action taken against CACEIS UK, Sapia Partners and Barclays Bank UK.
In addition, the FSCS will receive a payment of £800,000 as part of its statutory duties to pursue recoveries.
CACEIS UK is an asset servicing bank and will make a £31.7m voluntary payment to WealthTek clients for failing to act on information that left clients exposed to the risk of financial crime, the FCA said.
WealthTek was an FCA-authorised and regulated wealth manager. It provided discretionary, advisory and execution-only services to its retail clients. The business, which also traded as Vertem Asset Management and Malloch Melville, was placed into special administration in April 2023. Court cases are pending.
CACEIS UK became WealthTek’s sub-custodian in November 2020. WealthTek was then known as Vertus Asset Management LLP.
The FCA said that on three occasions, CACEIS UK checked the Financial Services Register which showed that WealthTek was not authorised to hold certain client assets but did not take sufficient action.
The firm also did not spot that WealthTek was not allowed to hold client money. Despite this it went on to open client accounts for WealthTek to use, then failed to monitor those accounts properly by not promptly reviewing and resolving alerts raised by their system.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “’Strong financial crime controls keep clients’ assets safe. CACEIS UK’s failures exposed clients to serious risk. The firm chose to do the right thing with extensive co-operation and agreeing to a substantial voluntary payment, and we decided not to impose a fine as a result.”
The voluntary payment will be distributed to WealthTek clients who have not been able to reclaim their money in full.
Earlier this year Sapia, the principal of WealthTek LLP, agreed to pay more than £19m to WealthTek clients after failing to protect their money. In a deal with the FCA, Sapia agreed to make a voluntary payment of £19,637,950 to WealthTek clients. The Financial Conduct Authority (FCA) has also censured the firm.
Promote your vacancy to thousands of professionals on Financial Planning Jobs
Our specialist jobs service Financial Planning Jobs can help you reach nearly 12,000 financial professionals. You can set up an Employer Profile and post your job the same day on Financial Planning Jobs (terms apply). Dozens of Financial Planning and Paraplanning firms have used our affordable service to recruit new talent.
