A financial adviser and ISA provider has gone into administration a few days after the FSCS launched an investigation into the firm.

Herts-based Business Agent Limited - trading as NextCrowd and NextFin - was placed under investigation by the FSCS earlier this week after being subject to several restrictions by the FCA and losing its ISA provider status.

The FCA said in a statement today that Business Agent Limited, which operated mainly via the NextCrowd website, had faced concerns about a number of failings.

Key FCA concerns uncovered last year were:

• Unauthorised handling of client money - the firm held and controlled client funds without the necessary permissions.

• ISA regulation compliance issues - the firm received ISA subscriptions into accounts that were not properly set up under the ISA Regulations.

• Lack of systems and controls, including failure to manage potential conflicts of interest and conduct adequate due diligence on investments listed on its NextCrowd platform

• Failure to disclose information - Business Agent Limited did not supply requested details about individuals connected to the firm.

• Potential breach of financial promotion rules - there may be compliance issues related to the approval of financial promotions.

On 22 July 2024, the FCA placed restrictions on Business Agent Limited and on 9 January this year, Business Agent Limited ceased being a HMRC-approved individual savings account (ISA) manager.

The regulator said that customers who did not transfer their ISA, or innovative finance ISA accounts, before that date may wish to contact HMRC or seek independent financial advice as those accounts no longer benefit from the ISA tax wrapper.   

On 8 May, Louise Longley and Julian Pitts, both of Begbies Traynor, were appointed as joint administrators.

The FSCS is investigating whether eligible claims against the firm are possible under its rules. It is not yet open to customer claims.

The Hertfordshire-based firm had been authorised by the FCA since September 2015 and was authorised to arrange deals in investments and credit broking. The firm was incorporated as a private limited company in December 2013, when it was registered initially as an advertising agency.

In February 2018 the firm was told not to carry on any activity that would constitute consumer buy-to-let mortgage business unless it registered as a consumer buy-to-let mortgage firm.

From July 2024 the firm also became subject to an order to cease regulated activity without the FCA’s prior written consent. At this time it also become subject to a requirement to secure and retain all records and to notify all clients and providers it holds accounts with of the order to cease regulated activity.

In February 2023 Business Agent’s directors agreed to create £3m, three-year maturity 12% fixed rate secured loan notes, with these created in November 2024. Loan notes are more usually used as a form of funding for entrepreneurs and young businesses. According to Companies House the loan charge remains outstanding.

The most recent financial statement made by the firm to Companies House (31 December 2023) shows the firm owed creditors £252,841.

Business Agent had two advisers registered with the FCA at the time of entering administration, Xiaoshu Gao and Sacha John Bright. Both were directors of the firm.