The FCA has issued a final notice to Sapia Partners LLP for failing to adequately protect client money of an appointed representative.

Sapia began working with WealthTek in 2013 and later appointed it as one of its appointed representatives. This led to Sapia holding, and being responsible for, protecting client money resulting from WealthTek's activities. WealthTek LLP was an appointed representative of Sapia from 2017 until becoming directly authorised by the FCA from 28 January 2020 until 4 April 2023 when the FCA told the firm to cease operations and to appoint Special Administrators.

Sapia has admitted that it failed to properly separate key roles within its business relating to client money. People who could make payments from client money accounts also carried out the checks of those accounts required by FCA rules. This lack of separation increased the risk that client money could be lost because of, for example, misuse or poor management.

Sapia will make a voluntary payment which will be distributed to WealthTek clients who have a shortfall in the money they have been able to reclaim. Were it not for this agreement to make the voluntary payment of £19.6 million (with the assistance of its ultimate parent company) and Sapia's cooperation throughout the investigation, the FCA would have imposed a penalty of £7,412,000 on Sapia (after the 30% discount for agreeing to settle the matter).

Of the £19.6 million, WealthTek's administrators will receive £19.1 million and the Financial Services Compensation Scheme (FSCS) will receive £500,000 (in accordance with its statutory duties to pursue recoveries where reasonably possible and cost-effective). Once FSCS has concluded any further recoveries actions, it will proceed to make distributions of any surplus to WealthTek's FSCS eligible clients under the rules set out in the Compensation Sourcebook of the FCA's Handbook.

In December 2024, the FCA, separately, charged WealthTek's principal partner John Dance with multiple criminal offences, including money laundering and fraud. A trial has been scheduled for September 2027 at Southwark Crown Court.

In addition, the FCA fined Barclays Bank UK PLC £3,093,600 for poor handling of financial crime risks in relation to a client money account opened by WealthTek. Barclays also agreed to make a voluntary payment of £6.3 million for distribution to WealthTek's clients who have a shortfall in the money they have been able to reclaim.

The FCA concluded its investigation in 12 months. It says that this is an example of how it is improving how quickly it carries out its investigations.