Wealth manager Dolfin has announced it is shutting down, following severe restrictions placed on its business by the regulator.
The firm, which claims to oversee client assets of about £3 billion, said in a statement to clients that it had taken the “difficult” decision to cease operating.
In March, the Financial Conduct Authority (FCA) barred Dolfin from carrying out regulated activity, due to concerns about its financial crime controls.
Dolfin’s statement said that the firm’s leadership was “surprised and disappointed” by the FCA’s actions, which occurred during an ongoing dialogue with the regulator.
“Despite the huge efforts made by Dolfin under the leadership of its new management team to de-risk the business, change Dolfin’s culture and business model and to ensure that the business is conducted in a fully compliant manner, it has not been possible to satisfy the FCA’s concerns,” the April statement said.
“As a consequence of the restrictions on Dolfin’s ability to carry on its business, and the attendant damaging publicity, the board of Dolfin, having taken appropriate independent professional advice, has decided to commence the closure of its business.”
Dolfin said it was now working to return client money, however, the FCA had made it clear that it will only give authorisation for the withdrawal of funds if there are “exceptional grounds to do so”.
“However, we hope that we will be able to commence the process of returning client monies and assets on a less restrictive basis in the coming weeks.”
The firm also said it was exploring options for transferring parts of its client book to other regulated service providers.
Dolfin has been contacted for further comment.
What happened?
The FCA imposed major restrictions on 12 March, citing “serious concerns” around the way that Dolfin operates its business, including its Tier 1 investor visa business activities and financial crime controls.
The regulator said at the time it had been working with Dolfin while it took steps to try and address these concerns, including imposing voluntary restrictions on regulated activities on 24 December 2019, and undertaking a ‘skilled persons review’ – a type of independent review the FCA can commission of a regulated firm.
The FCA said following this review “and developments that have taken place since”, it was imposing restrictions “in the interests of protecting the integrity of the UK financial system”.
Dolfin had planned to shift to a new City of London HQ, as part of its changing of the guard
Founded in 2013 and pitching itself as a private client-focused custody, execution and investment management business, Dolfin then ventured into expensive technology and platform-building projects which were subsequently canned under its new management.
But its main problems seem to have stemmed from its inability to demonstrate proper money laundering controls. Its investor visa programme has also attracted negative attention from the regulator. In 2019, for example, it agreed to stop its former practice of selling bonds to clients which were issued by companies in which Dolfin directors had an interest.
Dolfin had announced in February 2021 that it had leased a new headquarters in the City of London, as part of a series of changes to its leadership and business model following 10 months of transformation. During this period, staff numbers declined from 130 to about 75.
Rodney Baker-Bates, who joined the board as an adviser in March 2019, had recently stepped up as executive chairman to fulfil the firm’s CEO function, given the firm had been unable to secure a permanent replacement.
The remainder of Dolfin’s executive committee comprises Robin Davies who joined in May 2020 and has held senior operations and change posts at the likes of Citi, Deutsche Bank, and Lloyds; former Goldman Sachs director Rob Watts; Simon Black, Dolfin’s CIO since 2018; and Nick Emery, its head of compliance.
