Portsmouth finance firm enters administration after director alleged to have 'taken' over £2m of client money

Nexus Independent Financial Advisers (IFA) and Nexus Investment Managers (IM) went into administration on February 13. The Financial Conduct Authority (FCA) restricted them carrying out regulated activities – including adding new customers – on January 25.

In a public supervisory notice, the regulatory body said it had ‘very serious concerns’ regarding sole director, Kerry Nelson, and monetary withdrawals from customers ‘without their authorisation or without their knowledge.’ They said client fees ‘have then appeared to have been used to fund personal expenditure’.

NOW READ: Leigh Park dementia care home closed following series of bad CQC reports

The FCA said: ‘Specifically, it appears that the Firms’ Director may have taken a total of £2,072,242.80 in unauthorised and/or inappropriate withdrawals from clients of the Firms. The conduct appears to relate to multiple clients, and to have spanned at least the period from September 2021 to December 2022.’

The FCA added Ms Nelson withdrew £50,000 from the accounts and transferred it to her own in and around January 14, 2023. It added she is not performing ongoing functions at Nexus.

The company provides financial and mortgage advice, portfolio management and financial planning. Nexus IFA moved into The Camber – the former building of Sir Ben Ainslie's America’s Cup sailing team – in 2021. They sponsored last year’s Southsea Christmas Lights switch-on.

Administrators Carl Faulds and Nicola Layland from Leonard Curtis have been appointed to conduct a sale. Leonard Curtis said this was ‘deemed necessary because of the sole director’s absence from the business and concerns relating to the director’s conduct’ and the current management team is in place.

Mr Faulds added administrators ‘are liaising closely with the FCA through the sale process’, whose role is to ‘ensure that client interests are protected’. The FCA said ‘approximately £1,141,000’ was transferred ‘from the relevant business account held by one of the Firms, to the Firms’ Director’s personal bank accounts’’

The FCA said it was notified of problems following an internal investigation in December, which found that ‘significant fees’ were moved ‘onto the Firms’ Director’. They added no tasks were associated with ‘ad hoc’ fees being deducted from accounts, initially appearing in excess of £1.75m.

It added ‘ad hoc’ fees can be charged to customers following signed confirmation, or would be sent a letter referring to it. The document states £1,895,040 in 'ad hoc' adviser fees were transferred to Nexus IFA from accounts held by an individual client.

SEE ALSO: Condor Ferries secures new passenger and freight vessel

The FCA said four other clients had been subject to ad hoc charges of £111,000, £48,000, £9,700 and £7,500 respectively, following an investigation. The notice added these fees were not in line with ‘typical transactions’.

The FCA concluded both firms acted ’contrary to the interests’ of clients by taking money from investments which they were not entitled to.

‘There appears to be evidence that the Firms, specifically the Firms’ Director, has on multiple occasions taken substantial sums in “fees” from clients to which they were not entitled,’ they added. ‘These sums have then appeared to have been used to fund personal expenditure.’

James Wheatley, Anthony Van Gool, and Peter Geike-Cobb were all appointed as Nexus directors in November 16, according to Companies House, and they all resigned on December 7. Companies House lists Kerry Nelson as the sole director.