The regulator blocked an attempt by failed wealth firm Full Circle Asset Management’s managing director to ‘phoenix’ and purchase its client book, Wealth Manager understands.

Last week, Wealth Manager reported that Charles Stanley bought the assets of Full Circle, which fell into administration last year. However, a look through the administrators’ progress report reveals that Charles Stanley was actually the second choice for the business.

Initially, the administrators reached an advanced stage in talks for a new business, Sententia Wealth, to acquire Full Circle’s assets.

However, the Financial Conduct Authority (FCA) did not approve the exchange. Sententia Wealth was registered at Companies House in February 2018 by Andrew Selsby, who is the managing director of Full Circle. Companies House filings reveal he owns more than 75% of Sententia.

There is no suggestion that Selsby has committed any wrongdoing.

In the progress report, the administrators noted: ‘We reached an advanced stage with Sententia, but the FCA declined to give approval for a transfer of the business, due to imposition of a strict policy related to the insolvency of the company. We were therefore unable to proceed with the sale and reported negotiations with the other interested parties.’

The FCA declined to comment.

Full Circle was put into administration last year after it was ordered to compensate one of its clients, David Rocker. Rocker took the company to court claiming that it was in breach of contract when managing his medium risk portfolio. He was claiming £1.8 million in damages, but according to the administrators’ report, it has actually been assessed at £471,633.

Phoenixing is not illegal and is a widely used administration tactic that lets company directors avoid taking on a failed firm’s liabilities. But the practice has received criticism from the industry, as the claims typically fall on the Financial Services Compensation Scheme.

The regulator is also not a fan of phoenixing, with FCA director of supervision Megan Butler (pictured) having previously attacked the practice. Last month, MPs called on the FCA to produce a tangible plan to prevent firms involved in bad advice from resurfacing under different names.