FCA Censures CACEIS UK Over WealthTek Client-Asset Controls

The Financial Conduct Authority censured CACEIS UK on 25 June and said the asset servicing bank will make a GBP31.7 million voluntary payment for WealthTek clients after weaknesses in financial-crime controls left clients exposed to risk.

According to the FCA, CACEIS UK became WealthTek’s sub-custodian in November 2020, when WealthTek was known as Vertus Asset Management LLP. The regulator said CACEIS UK checked the Financial Services Register on three occasions and saw that WealthTek was not authorised to hold certain client assets, but did not take sufficient action. The FCA also said CACEIS UK did not spot that WealthTek was not permitted to hold client money, opened client accounts for WealthTek and failed to monitor those accounts properly.

The FCA said it chose not to impose a fine because of the firm’s cooperation and voluntary payment. The money will go to WealthTek clients who have not recovered their money in full.

Why it matters

Client-asset controls are a core trust issue for broker and investment-platform users. Traders often focus on spreads and platform features, but custody, client-money permissions and account monitoring determine what happens when a firm fails or misconduct is alleged.

The case is also a reminder that sub-custodians and banking partners can become part of the client-protection chain, even when the trading relationship sits with another firm.

What to watch next

Watch the distribution process for affected WealthTek clients, any follow-on administrator updates, and whether the FCA uses the case to reinforce expectations for firms that provide custody or banking services to regulated investment businesses.