Arjent, a London-based wealth manager bank-rolled by a chairman recently accused of fraud in the US, has gone bust, leaving the wider financial adviser industry to pay claims against it.
Documents on Companies House confirm that Fisher Partners was brought in as administrators on 25 February.
The firm has not yet been declared in default by the Financial Services Compensation Scheme and the administrators noted client money is not at risk as Arjent was not a custodian.
An FSCS spokesman said: “Arjent is not in default, but we are investigating a claim against them.”
Arjent’s company website, which is still live, stated : “In many ways we set out to treat your investment affairs as if they were a business. They deserve that level of care and attention”.
“It is our responsibility to formulate an investment strategy for you and to place this within a coherent financial plan. Competence and discipline are important, but so is judgement.”
Arjent’s accounts to 31 December 2014 revealed losses of £1.09m after tax, down from a £1.63m loss in 2013.
It claimed revenue growth of 45 per cent in 2014, but also noted administrative costs increasing year-on-year.
Cost reduction attempts included the reduction in head count in certain departments, as well as the closure of the Bath office, to focus on the London headquarters.
While cutting jobs elsewhere, more senior appointments were made in 2014, following those made in 2013 “in order to help the company recover from the ineffectiveness of the administrative and marketing strategies employed by the previous management team which departed in April 2012.”
The most recent accounts also detailed the Financial Conduct Authority approving a change in regulatory permissions which allowed it to offer financial advice.
The FCA stated that it could not comment on individual firms.
Accounts also detailed the fact that Arjent did not take on any external bank funding, preferring to rely on money from its chairman Robert DePalo and the companies managed by or affiliated with him, in the form of capital contributions to meet its liabilities as they fall due.
He had his appointment at the company terminated last year, after being indicted by a New York grand jury in May on charges of defrauding UK investors of around $6.5m (£4.6m) between 2010 and 2012. The US Securities and Exchange Commission also brought fraud charges.
The financial statements for 2014 were prepared on the going concern basis. “At the end of year, the company has sufficient resources to meet all its FCA capital requirements, despite costs incurred during the year,” they read, adding that “certain shareholders” made available sufficient funds to let Arjent continue to operate as a going concern for at least 12 months.
Back in February 2007, Arjent unveiled plans to launch an advice arm, following the development of an alternative investment division the previous year.
Then chief executive Tony Woodward said that creating a new business free from legacy constraints was a key part of the company’s strategy. “I created Arjent because I felt there was a gap in US stockbroking in the UK. (Arjent IFA) has been created to provide genuine client-centered financial planning.”
By 2012, partnerships with Parmenion and Novia boosted the firm’s platform-driven discretionary fund management solution.
peter.walker@ft.com
