UK-based financial advice company Nexus Independent Financial Advisers and its DFM arm Nexus Investment Managers have been sold to Vintage Wealth Management for £500,000.
The businesses entered administration on 26 January with Carl Faulds and Nicola Layland of Leonard Curtis appointed as joint administrators by the high court.
On 31 January, the Financial Conduct Authority (FCA) placed regulatory restrictions on the two companies, to prevent them from carrying out regulated activities and limiting access to their assets. This came after the FCA said that the firms’ director “may have taken a total of over £2m in unauthorised and/or inappropriate withdrawals from clients of the firms”.
The businesses were marketed for sale by appointed agent Hilco Valuation Services – and the administrators have released an update about the sale of the companies.
Leonard Curtis’ Layland said: “We previously advised that we had sought offers for the business and that a number of offers were received. We have been working since then to complete a sale as quickly as possible. We can confirm that a sale of the business assets was concluded on 9 March 2023 to Vintage Wealth Management Limited.
“I am pleased with the outcome, as it was a difficult process, taking into account the background and the role of the FCA. It was important to all parties that the interests of the clients were protected as well as achieving the maximum sum possible for creditors of the two companies.”
Vintage WM is a London-based advice firm, which previously bought IFA company Statehouse Private Wealth and Surrey-based Corfe Wealth Management for undisclosed sums.
Sale process
Hilco received 60 initial enquires, with 38 potential bidders entering into a non-disclosure agreement to enable them to access a confidential data room established to provide relevant information to potential buyers.
Some seven parties engaged in more detailed discussions, including calls with the management team, and were given additional information, resulting in four formal offers.
The sale required FCA approval, and they were provided with details of all offers received and also liaised with potential purchasers. As part of the sale process, a number of regulatory hurdles had to be overcome, including satisfying the FCA that the purchaser had the resources to be able to manage the volume of potential clients being transferred.
Leonard Curtis’ Faulds added: “The next stage in the administration will be to identify further monies that may be recoverable for the benefit of creditors and assisting the FCA with any further enquiries into the circumstances leading to the administration.”
Regulatory action
The administrators said at the time that their appointment was deemed necessary because of the sole director’s “absence from the business” and concerns relating to their conduct.
The FCA took action against Nexus Independent Financial Advisers and Nexus Investment Managers due to concerns that the firms’ sole director, who was not named, “may have deducted sums from clients without authorisation or without their knowledge”.
The UK regulator added: “Specifically, it appears that the firms’ director may have taken a total of over £2m in unauthorised and/or inappropriate withdrawals from clients of the firms.
“The conduct appears to relate to multiple clients, and to have spanned at least the period from September 2021 to December 2022. The proposed asset requirement is intended to preserve and prevent access to the firms’ accounts by the firms’ director and/or any other individuals that may be asked by them to facilitate further withdrawals.
“There is evidence to suggest that on or around 14 January 2023, the firms’ director was able to access bank accounts held by the firms and withdraw a further £50,000 which was transferred to their personal bank account. Consequently, the authority considers it necessary and proportionate to impose the requirements to address the ongoing risk of further dissipation and to preserve the firms’ assets and provide an appropriate degree of protection for the firms’ customers.
“The authority is also aware that the firms’ director is not performing any ongoing functions at the firms. Accordingly, there is an absence of individuals capable to making significant decisions at the firms and there is no oversight to other staff at Nexus IFA and Nexus IM.
“The authority considers that the imposition of the requirements should take immediate effect because the matters set out in this First Supervisory Notice demonstrate that the firm is unable to manage its affairs in a sound and prudent manner, and is putting consumers at risk.”
According to Companies House, the current sole director is Kerry Nelson. Peter Geike-Cobb, Anthony Peter Van Gool and James Wheatley all were directors for one month from November 2022 to until they resigned in December 2022.
This story originated on our sister publication, International Adviser.
