The Financial Services Compensation Scheme is still not open to individual claims relating to collapsed wealth management firm WealthTek, despite it being put into default.
The FSCS placed the firm in default on November 3, seven months after the FCA ordered it to stop running due to "serious" regulatory and operational issues".
The update read: “On September 14 we released an update that we anticipated that we are likely to protect eligible customers. We have now taken the next step by declaring WealthTek LLP ‘in default’.
“Note that we still remain closed to claims. However, this is an important step which needs to be made before we can process FSCS protection for WealthTek clients.
"There is still a considerable amount of work to do before customers can be reunited with money and assets and the issue of shortfalls addressed.”
It went on to say the FSCS is “continuing to work closely: with the joint special administrators and will provide updates and timescales when that information is known."
The body told FT Adviser it believes the losses the FSCS is likely to meet will be able to be arranged without WealthTek customers needing to complete a claim application form.
At this point it does not want customers to go to effort they may not need to.
The FCA is currently carrying out a regulatory and criminal investigation into both WealthTek and its principal partner, John Dance.
At the end of May the regulator froze the assets of WealthTek’s principal partner and launched an investigation after a potential shortfall of £81.4mn in client money was discovered.
At the time, the FCA said WealthTek is an FCA authorised and regulated wealth management firm which provided discretionary, advisory and execution only services to their retail clients and intermediaries. However, it did not have permission to hold client money or custody assets.
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
