The FCA has imposed sweeping restrictions on app-based London wealth management firm Strowz Ltd (FRN 792373) in response to “significant concerns” about the firm and its handling of client money.

Strowz, based in Holborn, London, has been barred by the FCA from carrying out any regulated activity.

The FCA says it has been concerned about the transfer of money from client accounts to other accounts, with over £2m potentially involved.

The FCA said in its First Supervisory Notice published this week: “In total, the Authority has identified payments totalling £2,218,446 being paid out of the Bank A Client Account…where the recipients do not appear to be clients of the Firm and where there is no reasonable explanation as to why the Firm was making payments from the Bank A Client Account to those recipients.” 

Strowz, launched in 2018, described itself on LinkedIn as, “an all-in-one financial lifestyle App to help you save, invest and grow your money to live your dreams."

The FCA restrictions mean the firm must not accept further client month or facilitate the movement of client assets or client money without the express written permission of the FCA. The firm must also keep assets in the business and notify the regulator about any additional bank accounts it intends to open.

The FCA said the restrictions, imposed from 2 April, followed concerns that Strowz was not meeting the minimum requirements that firms need to meet to carry on regulated activities. 

The regulator found that the firm was handling client money without having adequate systems and controls to prevent client money being mixed with the firm’s own funds.

Third-parties were also potentially able to access money held by the firm on behalf of its clients. The firm was also acting outside the scope of its regulatory permissions in relation to its client asset arrangements, which could have put clients at significant risk of harm, the FCA said.

The FCA said that following a visit on 26 March by FCA staff, the firm made a series of payments from the Bank A Client Account to the Bank A Operational Account, each at £99,999 and totalling £999,991.

The firm then made a payment of just over £900,000, described 3 as an “urgent transfer”, to an account of a third-party entity which appears to be connected to individuals linked to Company A. The FCA also identified from an analysis of the firm’s bank accounts “very significant sums” that have been paid from the Bank A Client Account to third parties, including Company A. 

The regulator said the firm had also failed to disclose “material” information on request.

The Firm was incorporated on 28 December 2016 and provided advisory and discretionary portfolio investment management service through an app. 

The firm had permission to undertake a wide variety of regulated activities including advising on investments (excluding Pension Transfers/Opt Outs), arranging deals in investments and dealing in investments as agent.