Fyshe Horton Finney’s administration has fallen into disarray, with a £1 million cash shortfall being uncovered by liquidators.
Fyshe entered voluntary administration in March following board-level disagreements and delayed expansion plans.
Clients are now facing fresh uncertainty over missing money and a long wait for their holdings to be valued.
Harrisons, the appointed administrator, has been combing the books for months and while it has given regular updates to Fyshe clients, concerns have been raised that investors have been unable to trade on their accounts without paying fees to the book’s new owner, Redmayne-Bentley.
One said an account had been untradeable since mid-March and voiced concerns about the ‘unbelievable’ cost of the administration, which currently stands in the region of £547,623.
Adding to this, documents seen by Wealth Manager revealed that – against Harrisons’ instructions – transactions have taken place in bank accounts that were ordered to be frozen.
These resulted in a swing from a credit balance of £29,000 to a £33,000 deficit. In the same documents, a discrepancy has been noted against two million client units.
David Clements, a director at Harrisons and one of the joint special administrators, said liquidating Fyshe had proved a ‘complex’ process, but he reassured clients they would soon receive their valuations and that Harrisons had been ‘completely transparent’ throughout.
He added that the position on client cash was still being clarified, but when it came on board as administrator the firm discovered ‘there should have been more money than there was’.
Claims totalling £17.5 million had come in versus a balance of £16.5 million, Clements said.
He said Harrisons is in contact with Lloyds over the unauthorised bank transactions, but it appears that the discrepancy over the two million client units looks to be an administrative error.
In terms of the cost of Fyshe’s administration, Clements pointed out the bill reflected what Harrisons had spent reconciling the stockbroker’s books and that a ‘host of issues’ had been uncovered along the way.
A spokesperson for Redmayne-Bentley, which earlier this year acquired £300 million of Fyshe’s assets from the administrator, stressed that the firm was independent from the liquidation process. As a result, it was unable to comment on the costs and shortfalls that occurred prior to its involvement.
However, where clients had been asked for payment, the firm said the administrators had identified individuals with outstanding fees.
Redmayne’s spokesperson said: ‘The terms of our agreement to complete the transfer of assets included a requirement to assist in the collection of these debts.
‘It should be noted that any money paid to the administrators for outstanding purchases should be refunded to clients once the process is complete. We have encountered little resistance to this when it has been explained to clients.’