FSA suspends A2O from all regulated activities
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The Financial Services Authority has suspended Alpha 2 Omega from all regulated activities over concerns around its compliance arrangements.
A20 has sent a letter to all its members/advisers informing them that the regulator has decided to change its permissions and ordered them it to cease all regulated activities for which it has permission from 5pm on January 21, 2010.
The decision does not apply to any regulated activities undertaken to complete existing transactions, which are proposals or applications which have been signed and dated by the client prior to the January 21 deadline.
A document sent to A20 advisers and seen by Money Marketing, says the FSA has informed A20 of the steps it must take before any applications to restore its Part IV permission are considered, this includes ensuring the competence of its advisers.
Money Marketing understands that A20 has been running a training scheme for its advisers to raise its competence levels this week.
The FSA recently ordered the IFA network to stop new business on certain funds, including Arch cru, as well as structured products, pension transfers and drawdown.
Regulatory Legal Partner Gareth Fatchett says: “We are advising 12 members of A2O concerned about the recent upheaval at the network. An enforced variation of permission by the FSA is never a good thing. Fundamentally, the network has been told to cease giving advice”
“My clients are concerned for their pipeline business and their clients.”
A spokesman for the FSA says the register is currently being updated to reflect the fact that A20’s permissions have changed and that it is currently unable to take on new business.
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Readers' comments (15)
Anonymous | 22 Jan 2010 9:46 am
And there's more to come...
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Evan Owen | 22 Jan 2010 9:55 am
Once again the appointed representatives (agents) pay for the inadequacies of their network (principal and authorised firm).
Will we ever see similar action in the bank adviser arena?
If not, why not? Any adviser worth his salt would not do the bidding of his/her line managers and flog the likes of the Aviva investment which hit the headlines with such a bang yet the banks do not have problems with their permissions, it simply doesn't give me confidence in the system when there is a disproportionate effort applied to the independent sector alone.
Society is in dire need of regulatory balance, I see none.
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Realist | 22 Jan 2010 10:13 am
Indeed there is...the FSA will ensure that standards are raised amongst IFAs, although many of them don't seem to understand or accept the need
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Realist | 22 Jan 2010 10:15 am
Evan, you're not wrong, but there is dire need for the IFA sector to get its own house in order - stones and glass houses and all that...
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Anonymous | 22 Jan 2010 10:40 am
Realist - you seem to have missed the point. Mr Owen was pointing out an obvious imbalance between the manner in which banks and product providers are penalised by the regulator when compared to IFAs. Banks and product providers almost always seem to have a fine of a few hundred thousand or a couple of million quid imposed when guilty of an offence (a tiny proportion of their overall turnover and profit), whereas IFAs tend to be suspended from taking new business (usually the kiss of death for them) or have tens or hundreds of thousands of pounds in fines, which are usually a very significant proportion of their turnover and profit.
Therefore, there are no significant effects of the punishment imposed on banks / product providers whereas the repercussions for IFAs and their authorised individuals are huge.
Mr Realist and those at the FSA should take note.
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Julian Stevens | 22 Jan 2010 11:00 am
What exactly were these compliance failings, when were they first identified and what opportunities were afforded by the FSA to A20 to rectify them? Was any remedial help and guidacne provided?
From this report, one gains the impression that the FSA either
1. waltzed in, didn't like what it saw and just said Stop everything or that
2. these compliance failings are of long standing and that, despite having been given every reasonable opportunity to get its house in order, A20 failed to do so.
If nothing else, the FSA surely has an obligation to provide firms with every reasonable assistance to meet its requirements within a manageable time scale.
But then, when we look back to the fiasco of TCF, all the FSA announced was that it had "decided to let firms work it out for themselves" which is hardly helpful, is it? Certain large investment houses were reported to be considering a legal challenge to the FSA's behaviour in this regard, which is a crazy state of affairs ~ the regulated at war with the regulator. Aren't we all ultimately supposed to be on the same side?
The overriding impression one gains from this is that, with the exception of the banks, the FSA is not on the side of the industry, as it certainly should be given what it charges us just for the privilege of being allowed to trade, but rather is manifestly against it. The FSA seems to be the policeman (with a big spiked stick), judge, jury and executioner all rolled into one and quite unaccountable to anyone. The PIA was once described by a respected think tank as "a totally unaccountable monster riding roughshod over anyone or anything that dares to stand in its way" and the FSA seems to be the same only worse. Pretty soon, it will have become simply impossible, in practical terms, to meet all the FSA's requirements. Is that not an exceedingly unhealthy and oppressive state of affairs?
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Simon Whitney-Montpellier Asset Mgt....AR of A2O | 22 Jan 2010 11:04 am
Great and I'm off skiing to Verbier today as well,can't say I will be leaving with a stress free mind but thats life I suppose.Just rang the FSA and they won't even talk to me,the qualification for dialogue is payment of their fees for 25 years and I've only been paying them for the last 20 years...thats fine because their attitude is always a timely reminder of how not to be.
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Dathan Steele | 22 Jan 2010 11:04 am
Sorry to say I told you so in my comments to the first story the other week about A20.
Mr 'Anonymous | 22 Jan 2010 10:40 am', you do raise valid points, and I'm sorry for the IFAs concerned, but if the advice given is poor (we don't know, but as A20 don't know either as their compliance and monitoring procedures are crap), then clients are probably being disadvantaged..... mis sold, poorly advised.
The stats show that the IFA model is not broken. Well, it might not be broken but it does have crumbling edges sometimes..... these type of companies reflect badly on all of us, and always have the potential to drag our good name through the mud, thus throwing clients into the arms of the retail and private banks. And we all know what happens then :(
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Man in Black | 22 Jan 2010 11:44 am
Julian,
IFA Networks are 'relationship managed' which means that unlike you and me who have to deal with the call centre in Dehli/Docklands, there is a reasonable dialogue going on.
I have worked in Network Compliance over the years and can assure you that there is often a good degree of prior warning...Many of these firms have a number of "private warnings" over some of the most basic issues.
Following Evan's comments, if anything can be said of mis-selling in the industry, its IFAs being mis-sold the network concept. The "we take care of compliance for you" mantra really means consistently cut corners on obvious issues whilst tying up more diligent ARs in all manner of red-tape.
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Anonymous | 22 Jan 2010 12:01 pm
Alpha to Omega UK Ltd. Suspended For All Part IV Permissions.
This is now another Park Row, with 100's of good, honest hard working Advisers now suspended completely from all activities as of Jan 21.
This is a dark time for Network Members, I suspect personal bankruptcies and family breakups could affect the stressed Advisers at all Firms being taken down by the FSA with no right to stand up for the compliant advisers, if a network fails to be compliant, it does not follow it's Advisers are all non-compliant. Why not let Advisers prove their competence by being immediately re-authorised at other firms that the FSA must deem to be competent?
To withhold re-authorisation is against the human rights of honest and compliant Advisers who are punished due to the failing of their networks. A person has the right to work and should have the right to prove there competence immediately at alternate firms. To do otherwise would indicate that the system to authorise advisers at all firms is deemed inadequate by the FSA - so surely ALL Advisers may be suspended at multiple firms if the FSA seemingly has such a lack of confidence in the new entrant programs at many Firms.
After all it was the FSA who fined a firm 250k and then appointed one of that firms Directors to run Northern Rock - it seems it is one rule for the Sand Man and the old boy network at the FSA and another for good Advisers with unblemished backgrounds.
Posted anonymously due to FSA's revenge program on our honest and fair industry.
Best Wishes to all the Advisers at Alpha to Omega, Park Row and other firms and networks.
I sincerely hope you regain the ability to earn your living soon and service your Clients in the ethical and professional manner your Clients are accustomed to.
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