The Financial Conduct Authority (FCA) has placed a number of restrictions on Fareham-based advice business Nexus Independent Financial Advisers and its DFM arm, Nexus Investment Managers, to prevent them from carrying out any regulated activities and limiting access to their assets.
The FCA said this is “due to concerns about use of certain funds that appear to have been withdrawn by a senior individual in the firms”.
Nexus Independent Financial Advisers has been authorised by the FCA since 2012, while Nexus Investment Managers has been registered with the regulator since 2014. According to the FCA register, both companies entered administration on 26 January 2023.
The firms have the right to make written or oral representations to the UK regulator on its First Supervisory Notice. They also have the right to make a reference to the Upper Tribunal.
Details
The FCA took action against the firms because it is concerned 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 ($2.46m, €2.28m) 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.”
International Adviser has contacted the firms for a comment – but they did not reply in time for publication.
According to Companies House, the current sole director is named 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.
Restrictions
The FCA’s restrictions were placed on the firms on 25 January 2023.
The regulator said they will stop Nexus Independent Financial Advisers and Nexus Investment Managers from carrying on any regulated activity and prevent them from reducing the value of the assets they hold, without prior consent.
Restrictions on the firms include:
- Immediately cease carrying on all regulated activities for which it has a Part 4A permission, other than where it has the express written consent of the FCA to carry on a regulated activities;
- They must, within 72 hours of the receipt of the First Supervisory Notice, write to (i) all clients and; (ii) all platforms upon which its clients have funds placed, informing each of them of the imposition of the requirements and their effects, in a form and further to a method of delivery each to be agreed in advance with the FCA;
- Securing all books and records and preserve all information, including material held via online/cloud-based systems to which it has access, in relation to regulated activities carried on by it. These include but are not limited to all: (i) client lists; (ii) communications with clients; (iii) financial records. These also include any materials that they hold and which are relevant to the factual matters referred to in the First Supervisory Notice; and
- The firms must not, without the prior written consent of the FCA, take any action which has, or may have, the effect of in any way disposing of, withdrawing, transferring, dealing with or diminishing the value of any of its own assets, whether in the UK or elsewhere.
Nexus Independent Financial Advisers and Nexus Investment Managers are in no way associated, affiliated or have any connection with Nexus Insurance Brokers, Nexus Financial Services and Nexus Financial Advisers – which are all part of the Dubai-based Nexus Group.
Nexus Independent Financial Advisers and Nexus Investment Managers are in no way associated, affiliated or have any connection with Nexus Global IFA Network or Blacktower Financial Management Group.
