Compliance

FCA's Fine, Ban Of Advice Firm Boss Could Be Blocked By Upper Tribunal

Josh O'Neill, Reporter, 2 December 2016

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The UK's financial watchdog could see its decision to impose a ban overturned.

The Financial Conduct Authority's plan to fine the former chief executive of an advice firm more than £230,000 ($290,266) and ban him from all senior management roles within the industry could be reversed by an upper tribunal.

The FCA alleged that Alistair Burns, who led TailorMade Independent, failed to ensure that his firm provided suitable advice to its clients and that he personally failed to disclose conflicts of interest relating to other individuals at the firm.

However, the FCA's decision notice, an official document reflecting the financial watchdog's view of Burns' actions while outlining its enforcement plans, has now been referred to the upper tribunal by Burns in an attempt to overturn the decision. “The tribunal may uphold, vary or cancel the FCA's decision,” the UK regulator said in a statement.

According to the FCA, the Financial Services Compensation Scheme has shelled out £40 million in relation to 919 claims made against TMI. More than half of the affected clients invested in a firm specialising in overseas property which subsequently went into liquidation, resulting in the entirety of those investments being lost.

Between 2010 and 2013, TMI provided advice to clients who were considering transferring or switching their existing pension funds through self-invested personal pensions into unregulated investments. During this period, 1,661 clients invested more than £112 million in alternative investments, many of which were not permitted by their existing pension schemes. 

As a result, the FCA concluded that the advisory process, for which Burns was jointly responsible, was inadequate as it failed to take into account customers' individual circumstances, demands and needs. The FCA also alleged that Burns received “significant financial benefit” from his positions as a director and shareholder of an unregulated introducer which referred clients to TMI. 

Consequently, the FCA ruled that Burns was “not fit and proper to perform senior management or significant influence functions in relation to regulated activity in financial services”.

WealthBriefing will continue to monitor this case and will update news coverage accordingly. 

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