The regulator revealed the new figure in an update published yesterday, following the publication of the report from special administrators at BDO.

BDO said that of the £233m that WealthTek had held on its platform, there was a shortfall of £71.7m in custody assets and £9.7m in client money.

BDO said the “special administrators naturally understand the concern this will cause to clients and are working as quickly as possible...to expedite matters, given the position they inherited and issues they faced on their appointment.”

The regulator ordered the Newcastle-based wealth manager to cease all regulated activities in April following the discovery of regulatory and operational issues.

The firm’s boss John Dance was arrested in connection with the investigation and has been interviewed by the regulator under caution.

The High Court appointed Shane Crooks, Mark Shaw and Emma Sayers of BDO LLP as joint special administrators of WealthTek. Alongside this, the FCA obtained a worldwide order to freeze assets belonging to Mr Dance up to the value of £40m.

The FCA said it is “conducting a regulatory and criminal investigation into both WealthTek and its principal partner, John Dance, which includes potential regulatory breaches relating to client money and custody assets, and criminal offences of fraud and money laundering.”

Mr Dance started out in the post-room of a stockbroking firm before working for Merrill Lynch. He owns a club in Newcastle and promotes himself as an occasional DJ.

He is also a well-known racehorse owner. His horse Bravemansgame won the King George VI Chase and was a runner-up at the Cheltenham Gold Cup. The racing authorities forced ownership of that horse to transfer to its co-owner, Bryan Drew, because of the investigation into Mr Dance.

WealthTek (reference number: 832264) is an FCA-authorised and regulated wealth management firm which provides discretionary, advisory and execution-only services to its retail clients.

It also trades under the names of Vertem Asset Management and Malloch Melville.

Vertem is an independent investment manager based in Newcastle upon Tyne, with a client base across the UK. Founded in 2010 by John Dance, Vertem specialises in creating bespoke, flexible and suitable investment portfolios for professional clients, private individuals, charities and pension funds. The firm works both directly with private clients and via intermediaries including IFAs.

Malloch Melville is an Edinburgh-based wealth manager and stockbroker offering both model and bespoke discretionary management. It was founded in 2015 by Jeremy Balfour-Melville and Thomas Malloch. The firm creates investment solutions for financial advisers, private individuals, family trusts, corporates, IHT portfolios, GIAs and SIPPs/SSAS.

The FCA said: “As BDO have explained to WealthTek’s customers, further investigations are needed to establish the full picture and we will work closely with them to do all we can to reduce the harm to consumers.”