Clients of failed Newcastle-based wealth manager WealthTek LLP will make a smaller contribution to the costs of the administration than previously estimated, after a fresh judgment in the case last week.

The judgment confirmed that the costs contribution under the distribution plan should not include a reserve for the costs of potential future litigation by WealthTek and/or the joint special administrators against third parties. 

As a result of the judgment handed down on 28 November, there will be a reduction in the costs contribution per client to £15,135.

Former clients of the firm whose shortfall claims exceed £62,000 will receive additional compensation totalling a maximum of £7,865.

Last month the Financial Services Compensation Scheme made a first payment of £26.6m to the administrators.

The administrators have revealed that they distributed the cash to 348 clients, with a further 112 clients having been provided with future distribution dates, scheduled for this calendar year.

They said they expect to be in a position to issue further distribution dates in the coming weeks but said that they may end up being in the new year.

They said that around 120 clients are yet to engage in the process that will allow the administrators to return their assets.

WealthTek (FRN: 832264) was an FCA-authorised and regulated wealth manager. It provided discretionary, advisory and execution-only services to its retail clients.

In April last year the FCA ordered WealthTek Limited Liability Partnership to cease all regulated activities following the discovery of regulatory and operational issues. 

WealthTek, which also traded as Vertem Asset Management and Malloch Melville, was placed into special administration on 6 April 2023 with Shane Crooks, Mark Shaw and Emma Sayers, licensed insolvency practitioners from BDO LLP, appointed as joint special administrators.