Sapia to pay £19.6million after FCA finds failures in safeguarding client funds
The Financial Conduct Authority has censured Sapia Partners LLP after the firm agreed to make a voluntary payment of £19,637,950 to clients of WealthTek.
The payment follows an FCA investigation, which found that Sapia failed to implement adequate safeguards to protect client money linked to the activities of WealthTek LLP, for which Sapia had responsibility.
Sapia began working with WealthTek in 2013 and was later appointed as an appointed representative. This arrangement meant Sapia was responsible for holding and safeguarding client funds generated through WealthTek’s business activities.
The FCA concluded that Sapia did not put sufficient controls in place to protect this money. In particular, the firm failed to properly segregate key roles relating to client money handling. Individuals who were able to authorise payments from client accounts were also responsible for conducting checks on those same accounts.
According to the regulator, this lack of separation increased the risk of client money being lost through misuse or poor management. The FCA stated that such weaknesses create opportunities for misconduct and undermine required safeguards.
The voluntary payment will be distributed to clients who experienced shortfalls in the funds they were able to recover. Of the total amount, approximately £19.1 million will be allocated through WealthTek’s administrators, while £500,000 will go to the Financial Services Compensation Scheme.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said that inadequate safeguards around client money expose consumers to unacceptable risks. She stated that Sapia’s failures increased the likelihood of losses occurring.
The FCA confirmed that it did not impose a financial penalty on Sapia, citing the firm’s cooperation during the investigation and its agreement to make the voluntary payment. The regulator indicated that, without these factors, it would have imposed a fine of £7.4 million.
The investigation was completed within 12 months, which the FCA described as part of its efforts to improve the speed of enforcement action.
The case is linked to wider enforcement action involving WealthTek. In December 2024, the FCA charged the firm’s principal partner, John Dance, with multiple criminal offences, including fraud and money laundering. A trial is scheduled to take place at Southwark Crown Court in September 2027.
The FCA reiterated that firms must comply with its client money rules, including requirements under the Client Assets Sourcebook, to ensure adequate protection of funds held on behalf of clients.