The Financial Services Compensation Scheme (FSCS) is to open further investigations into failed wealth manager WealthTek as it makes ‘substantial progress’ on client payouts.

It will consider whether investors may have other types of claims against the firm, such as in relation to acts or omissions by the firm that resulted in investment losses.

WealthTek clients have already received compensation for claims about shortfalls in client holdings and client money.

So far the FSCS has paid over £26.6m to the joint special administrators to fund shortfalls in customers’ assets and money. It is paying the funds and cost contribution to the administrators directly in line with the terms of a court-approved distribution plan.

The compensation body has opened its online claims service for clients who feel they may have an additional claim to make.

WealthTek (FRN: 832264) was an FCA-authorised and regulated wealth manager. It provided discretionary, advisory and execution-only services to its retail clients.

In April last year the FCA ordered WealthTek Limited Liability Partnership to cease regulated activities following the discovery of regulatory and operational issues.

WealthTek also traded as Vertem Asset Management and Malloch Melville and was placed into special administration on 6 April 2023.

WealthTek claims are subject to the FSCS compensation limit of £85,000 per client.

Many clients will already have received the maximum compensation of £85,000 for the shortfalls and cost contribution. Many clients of the failed firm lost more than the limit and therefore have yet to be fully compensated.

In order to receive further compensation, the FSCS has instructed WealthTek clients to contact the administrators in order to retrieve any remaining money and assets to cover any shortfall in compensation.

The industry safetynet added that customers whose overall loss was greater than £85,000 may receive an additional distribution as part of the FSCS’s recovery process. This will be assessed based on the records from the initial shortfall and cost contribution process so WealthTek clients will not need to make a further claim.

Clients of the failed Newcastle-based wealth manager will make a smaller contribution to the costs of the administration than previously estimated, after a judgment in the case in November.

The judgment confirmed that the costs contribution under the distribution plan should not include a reserve for the costs of potential future litigation by WealthTek and/or the joint special administrators against third parties.

The former principal partner of WealthTek, John Dance, also a former leading racehorse owner, is to stand trial in connection with allegations of a £64m fraud and money laundering charges.

Mr Dance, 50, a well known figure in British horse racing circles, has pleaded not guilty to the charges brought by the FCA and will stand trial.

Due to delays in the court system, the trial date has been set for September 2027.

In a separate matter, the High Court, following an application by the FCA and consented to by Mr Dance, agreed that civil proceedings brought by the FCA in April 2023 will be paused until the conclusion of the criminal proceedings or until a further order by the court.