The administrators of collapsed wealth manager WealthTek have returned almost £95m to 904 clients although the overall client shortfall still stands at £80.8m.

In a progress report published last week, the administrators said they had returned £92.91m of custody assets and £1.98m of client money.

The progress report covered the period 6 April to 5 October, during which the administrators said they returned £13m to 149 clients.

They said they also raised £2.7m from selling “141 lines of surplus assets” during the period and issued payments totalling £893,537 to 608 clients.

The administrators said they had been liaising with a number of SIPP providers in relation to client accounts. During the period they said five SIPP accounts were returned to clients to bring the total amount of SIPP accounts returned to 144.

The administrators said that 17 clients, with an average balance of £1,000 or more, are yet to engage in the process that will allow the administrators to return their assets.

Newcastle-based WealthTek (FRN: 832264) was an FCA-authorised and regulated wealth manager. It provided discretionary, advisory and execution-only services to its retail clients.

The business, which also traded as Vertem Asset Management and Malloch Melville, was placed into special administration on 6 April 2023 with Shane Crooks, Mark Shaw and Emma Sayers, licensed insolvency practitioners from BDO LLP, appointed as joint special administrators. Mr Shaw was replaced by Kirsty McMahon as joint special administrator in October 2024.

In October 2024  the Financial Services Compensation Scheme made a first payment of £26.6m to the administrators. The administrators initially distributed cash to 348 clients, they said. In total the administrators said they had now made five drawdown requests for funds from the FSCS to date, totalling £32,549,044.52.

In April last year the FCA ordered WealthTek Limited Liability Partnership to cease regulated activities following the discovery of regulatory and operational issues. In December 2024, the FCA charged WealthTek’s principal partner John Dance with multiple criminal offences, including money laundering and fraud.

Mr Dance, 50, a well known figure in British horse racing circles, has pleaded not guilty to the charges brought by the FCA and will stand trial. Due to delays in the court system, the trial date has been set for September 2027.

In a separate matter, the High Court, following an application by the FCA and consented to by Mr Dance, agreed that civil proceedings brought by the FCA in April 2023 will be paused until the conclusion of the criminal proceedings or until a further order by the court. 

The administrators said they, “understand that any recoveries made by the FCA in any proceedings resulting from its investigations will be for the benefit of those adversely affected and/or suffered a loss as a result of contravention of the regulatory requirements.”

In July the FCA fined Barclays Bank UK PLC and Barclays Bank PLC a total of £42m for major failings in their financial crime risk management including one relating to WealthTek. Barclays agreed to make a voluntary payment of £6.3m to WealthTek’s clients who have a shortfall in the money they have been able to reclaim. 

Clients of WealthTek will make a smaller contribution to the costs of the administration than previously estimated, after a judgment in the case in November.

The judgment confirmed that the costs contribution under the distribution plan should not include a reserve for the costs of potential future litigation by WealthTek and/or the joint special administrators against third parties.