Full Circle Asset Management, a wealth management company, has fallen into administration, following a loss in a court battle with a client who was asking for £1.8m in damages.
Administrators were appointed at Full Circle which is based in Kent at the end of last month, weeks after a judge from the High Court ruled that the company must pay David Rocker, a former client, an as-yet-undecided amount.
Rocker had alleged Full Circle had mismanaged his medium-risk investment portfolio after over half of its £1.5m value was wiped off. The judge acknowledged that the wealth manager was in breach of both contract and mandate, as because of its failure to sell assets which lost over five percent of their value.
If Full Circle does not have sufficient assets to cover its liabilities as the administration continues, the claims will be handed to the Financial Services Compensation Scheme (FSCS) for payout. Since the FSCS is financed by a levy charged on financial services companies, this means that the costs of the failure of Full Circle will be spread across the industry.
PCR, the administrators, stated that all the money of the clients is in segregated accounts and is therefore not put at risk. It added that it aims to sell the business as a going concern, and had maintained the existing management team in order to provide “continuity” for now.