Your IndustryJul 1 2021

Wealth manager falls into administration after FCA restrictions

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Wealth manager falls into administration after FCA restrictions

Wealth management firm Dolfin Financial has fallen into administration only months after the regulator told it to stop carrying out regulated activities.

Adam Stephens and Kevin Ley of Smith and Williamson were appointed joint special administrators of Dolphin yesterday (June 30).

It comes after the firm was forced to cease regulated activities by the Financial Conduct Authority (FCA) back in March.

At the time the City watchdog said it had “identified a number of serious concerns around the way that Dolfin operates its business".

These included the firm’s tier one investor visa business activities and financial crime controls.

In December 2019, the firm was on the receiving end of FCA restrictions after concerns were raised regarding how it invested funds deposited by tier one visa clients amid apprehensions around potential conflicts of interest.

The FCA previously said it had been “working with Dolfin while it took steps to try and address these concerns, including imposing voluntary restrictions on its regulated activities on December 24, 2019, and commissioning a Skilled Persons Review.”

Following the conclusion of the review, the FCA decided to go ahead with imposing restrictions.

Since March, Dolfin has been exploring available options to wind down the business and transfer client monies and assets to a new provider.

The firm has about 500 clients with underlying client monies of £120m and custody assets of £1.28bn.

But earlier this month the company found this wind down could not take place outside of a formal insolvency process after it reviewed its financial position.

The business was placed in special administration, with Dolfin looking to find a suitable successor.

Adam Stephens, joint special administrator of Dolfin Financial (UK) and partner at Smith & Williamson, said: “The priority for the joint special administrators is to identify, protect and in due course return client money and custody assets to clients in accordance with their interests. 

“The joint special administrators are continuing to hold detailed discussions with the intended acquirer with a view to finalising the terms of any transfer.”  

Dolfin is an independent wealth management firm providing investment management, investment advisory, execution-only and custody services to a range of clients. 

As at the date of special administration the company employed nearly 30 staff.

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