Nexus Independent Financial Advisers and Nexus Investment Managers have entered administration and been put up for sale after the FCA placed restrictions on the firms.
Two administrators from Leonard Curtis - Carl Faulds and Nicola Layland - have been appointed to the Portsmouth advice firm by the High Court.
Notice of the appointment was published on Companies House last week (February 8).
At the end of last month the FCA placed restrictions on Nexus Independent Financial Advisers and Nexus Investment Managers over concerns about £2mn being withdrawn from client investment accounts.
The administrators said their appointment was "deemed necessary" because of the sole director’s absence from the business and due to concerns relating to the director’s conduct.
The rest of the management team is still in place and the business has been marketed for sale.
The sale agent, Hilco Valuation Services, has received "a number of bids" for the business, according to the administrator.
"We are liaising closely with the FCA through the sale process, whose main role is to ensure that client interests are protected, and we expect a sale of the business and voluntary transfer of clients to take place within the next 14 days," said Faulds.
Layland added: "We are grateful to the management team who have been acting responsibly under guidance from the FCA, to deal with the unfortunate circumstances regarding the director’s absence from the company and have been assisting us as administrators".
Last month the FCA told both firms to immediately cease carrying on all regulated activities and to stop onboarding new customers.
The regulator said it appeared around £2mn was withdrawn from client investment accounts and transferred to Nexus’s IFA and IM business accounts between September 2021 and December 2022.
There is also evidence, the City watchdog said, which suggests the firms' sole director - Kerry Nelson - transferred £1.4mn from one of the business accounts to her personal bank account.
An internal investigation led to the firms notifying the FCA that it had identified concerns around the solvency of Nexus IFA and the deductions of significant "fees" from a client.
It later came to light that a total of five clients were affected.
Earlier this month, FTAdviser revealed that the investment platforms Nexus used between 2021 and 2022 were Nucleus and 7IM.
An investigation by Nucleus found £1,895,040 in 'ad hoc' adviser fees were transferred to Nexus IFA from accounts held by an individual client.
Meanwhile a "high-level review" by 7IM found four clients had been subjected to deductions of ad hoc fees by both firms, of £111,000, £48,000, £9,700 and £7,500.
Nucleus and 7IM notified the FCA of their findings in December.
FTAdviser asked both platforms when they began looking into the client fees taken by Nexus, but neither were able to comment due to ongoing investigations.
At the end of November, three directors were appointed to Nexus - James Wheatley, Anthony Van Gool, and Peter Geike-Cobb. Just a week later, all three directors' appointments were terminated.
Another firm 'misappropriates' £1.5mn in client funds
Last week the regulator placed restrictions on another IFA - Romsey-based Campbell & Associates - over concerns its sole director may have misappropriated £1.5mn of a client’s funds.
Like Nexus, Campbell & Associates is now prevented from carrying out any regulated activity.
Lisa Maureen Campbell is listed as the sole active director of the firm and is holder of senior management functions.
An investigation by the FCA showed that between July 2022 and January 2023, a client’s funds were transferred to the personal accounts of Campbell or otherwise used to purchase a property for her to live in.
The consumer repeatedly contacted the firm to arrange for their investment to be repaid as planned but the firm instead advised that the investment be rolled over.
ruby.hinchliffe@ft.com
