St James's Place has paid out £1.25m in compensation and redress to clients after uncovering evidence of serious misconduct by former partner Christopher Bladen.
Between July 2009 and November 2012, Bladen invested at least £402,500 in funds he was not authorised to, according to the Insolvency Service. The funds underperformed and the clients lost their investment.
An investigation conducted by the Insolvency Service also found that Bladen, who filed for bankruptcy earlier this year, misappropriated at least £858,000 of funds.
St James's Place has since repaid or offered his clients a total of £1.25m in compensation and redress. No clients were lost as a consequence and the wealth manager said all affected clients have been fully reimbursed.
Bladen received the funds given to him for investment either by cheques made payable to himself or paid directly into his personal bank account. On several occasions he amended the payee details on cheques for his own benefit.
He used the money to fund his own lifestyle, pay creditors, including clients whose money he had utilised and to gamble, according to the Insolvency Service.
A spokesman for St. James's Place said: "Late last year we discovered serious misconduct by one of our partners. We immediately terminated his contract, informed Kent Police and have ensured none of our clients were disadvantaged.
"All evidence and information was passed to Kent Police in 2012 and the matter is in their hands. It would therefore be inappropriate for us to comment any further whilst they carry out their enquiries."
Bladen, a self-employed financial advisor, was handed a 14-year Bankruptcy Restriction for breaching and abusing a position of trust and misappropriating clients' funds.
He is not permitted to manage or control a company until September 2027 without leave of the court.
Slow progress in improving diversity
Share purchase deal with assets of £28m
Came into effect in January
Three examples of compensation rule issues
Buying in baskets