FSA fines network head £49,000
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The FSA has fined Julian Harris, the sole proprietor of Julian Harris Financial Consultants and the sole shareholder of Julian Harris Mortgages Limited, £49,000 and banned him from acting as a compliance officer.
The FSA says between October 31, 2004 and July 22, 2010, Harris, who was responsible for the two networks, failed to perform adequate due diligence on appointed representatives and advisors before appointing them.
He also failed to employ ARs who were fit and proper, put in place adequate training and oversight procedures for staff and maintain systems and controls at his firms and monitor staff activities to ensure that they complied with regulatory requirements.
The FSA says the misconduct is serious because regulatory enforcement action has been taken against Harris on two previous occasions, the breaches lasted for a prolonged period and, as a result of them, new advisers and ARs were not subject to adequate vetting before being appointed and were not adequately trained or monitored after appointment.
The regulator says in some cases, incompetent or unfit individuals may have been appointed, and customers may have been exposed to the risk of receiving unsuitable advice.
As well as the fine, the FSA has banned Harris from performing the CF10 Compliance Oversight function and from acting as a compliance officer.
Harris agreed to settle at an early stage of the FSA’s investigation and therefore qualified for a 30 per cent discount. Were it not for this discount, the fine would have been £70,000.
Harris says: “We accept and have taken onboard all the findings of the FSA staff. We have appointed a new head of compliance. Julian Harris will concentrate on the business aspects of our IFA and MA networks.
“All remedial work and improvements to our systems and controls have taken place and we believe we have a good ongoing relationship with our FSA supervisor. We believe this action has put us in a stronger position than previously and we are optimistic about our future and our offering in the marketplace.”
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Readers' comments (13)
Barry Woolley | 30 Nov 2011 10:46 am
Typical isn't it. I do not condone non compliance but the principle gets fined because he is responsible for oversight but more particularly he represents a small company. When was the last time we saw anyone from a bank or other large institution being fined or censured. Make individual Directors of these large institutions responsible personally and then we will see the industry being cleaned up. But then they are part of the same establisment that the principle's of the FSA occupy and it would not do to cause a loss of occupation or personal reserves for one's pals now would it!
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Anonymous | 30 Nov 2011 10:53 am
I think, Barry, despite the alleged failings of the Banks, that their recruitment of advisers involves far more stringent due diligence than it appears that Mr Harris employed.
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Lawrie H | 30 Nov 2011 10:55 am
Barry you're dead right.
What happened to Fred Goodwin who led the world to the credit crunch?
Retired on an £800k pension.
Something stinks
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Anonymous | 30 Nov 2011 11:11 am
Due diligence might have been easier to achieve, then and in the future if the FSA hadn't backed down on individual registration of mortgage and GI advisers. It is a disgraceful shambles. I'm not saying this guy is completely blameless but the FSA need to step up to the mark too...
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Chris F | 30 Nov 2011 11:14 am
When will they fine an individual from a bank?
£3billion of PPI mis-selling. No individual responsible.
Widespread investment mis-selling. No individual responsible.
The world economy in ruins. No individual responsible.
I was speaking with an ex colleague yesterday who now works for a large Spanish owned bank.
He has to make 3 phone calls per day - the first is a morning sales conference call. Each "adviser" gives pledges for the sales they will make that day - even though they have no idea who is in their diary.
2nd phone call after lunch time to update their “manager” on how they have done and to give a further pledge for that afternoon.
The 3rd at the end of the day to let the "manager" know how they have done. If they do not "live up to" their pledge then they are questioned as to why not. Invariably it is because investing customer money would not have been suitable - but this does not stop the questions or pressure.
This same "manager" sat in on another colleague’s sale of a large amount invested into a structured product to a 90 (yes, that's NINETY) year old who had previously only invested in cash.
Do they even know what happens to these on death I wonder? I suspect they do - but they don't care as I am sure he had his own pledge to fulfil to his own "manager".
This is what a consumer is up against. This is what the FSA will not tackle. This is the elephant in the room.
All of the above is why I have no respect for the FSA and nobody I know has any respect. This is why instead I have nothing but opprobrium for the over paid fools supposed to be regulating this "profession".
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Anonymous | 30 Nov 2011 11:18 am
This is a large Network. Due Diligence in it's recruitment procedures has absolutely nothing to do with the FSa's stance on registration of mortgage and GI advisers.
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William Kingsley | 30 Nov 2011 11:18 am
I take on board the previous comments comparing the sanctions given to banks & IFAs. The FSA comment about Julian Harris is that their actions 'may have put clients at risk' which is not good but what excuse do the banks have when their recruitment of advisers is more stringent and then they still have appalling complaints records. This must surely mean that the culture into which the banks recruit these people is fatally flawed.
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Ned | 30 Nov 2011 11:26 am
The FSA will never do anything positive to ensure such events do not occur in future, as Mr Sants stated recently, in one of his many unimportant announcements that the FSA was set up to be an after the fact type of regulator. Of course it is, taking responsibility for supervising firms such as KIS Ltd, Lehmans, Integrity would load the responsibility for their failures on to their backs, and we all know how those are well covered.
Mr Sants is our industries equivalent of "Fred the Shred" and will continue to run the FSA as a gravy train for overpaid, underqualified, inadequate and inefficient staff. The RDR is just another example of Bottom Up thinking (talking out of)
The FCA will be no better.
Why did the FSA not fine the compliance officer of Alpha 2 Omega who let the firms advisers sell such toxic products as the Integrity GTEP and Forex products to unsophisticated older clients, which has brought so much misery and loss to those clients whose lifetime savings were eventually ripped off by misrepresentation and in some cases deliberae fraudulent misrepresentation.
As one contibutor said, why don't they fine the directors of banking organisations whose lack of customer care and unsuitable advice has been legion?
How could we think of such a thing?
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Cap'n Birdeye | 30 Nov 2011 11:58 am
...'customers may have been exposed to the RISK of receiving unsuitable advice'...
Nowhere in the article does it say that any bad advice had been provided. So this is all about record keeping.
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Anonymous | 30 Nov 2011 12:00 pm
I was previously an adviser for Julian Harris and since have joined a couple of other networks. I can speak from personal experience that JH network is the best that I have experienced in compliance checking of files etc and the quality of advice given by adviser's.
I can speak first hand that there are larger networks out there with large AR's that I would not let any of their adviser's any where near my friends or family to give advice !! I can guarantee they will also jump on this thread to try to rubbish JH as part of their unorthodox recruitment process's
It's just a shame I can't mention them!!
JH is a good solid little network with good quality adviser's.
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