FSA publicly censures Birmingham-based IFA
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The FSA has publicly censured Exclusive Asset Management Limited for systems and controls failings.
The regulator says the firm Birmingham-based firm also showed an inability to demonstrate the suitability of its advice and failing to communicate with clients in a clear, fair and not misleading way.
The case is related to that of Gary John Hexley who worked for Exclusive between January 15, 2009 and May 25, 2010 and was publicly censured and prohibited by the FSA on June 13, 2011 for giving customers unsuitable investment advice.
The failings were found during an unannounced visit to the firm’s offices in April last year. The investigation found a number of systems and controls failings specifically in relation to Hexley’s compliance standards. Despite issues being identified by Exclusive it failed to ensure sufficient monitoring of Hexley which meant that he failed to obtain and record sufficient information about customers before giving them advice, adequately explain the reasons for his recommendations, assess adequately customers’ attitudes to risk, and research product recommendations instead relying on a small selection of preferred investments which yielded higher commission.
The FSA also found that Exclusive failed to ensure ongoing training and competency of its staff, record sufficient information about customers’ personal and financial circumstances to ensure the suitability of any advice it gave as well as ensuring that its systems and controls were adequate to monitor the suitability of advice.
Exclusive went into administration on May 24, 2011. The regulator says that had this not have been the case it would of incurred a £60,000 fine.
FSA head of retail enforcement Tom Spender says: “The fine we would have levied on Exclusive reflects the seriousness of the failings found at the firm. Financial advisers and providers alike must take notice of Exclusive’s failings and ensure they learn from them. Firms operating in this industry must comply with the FSA’s rules and we will take robust action against firms and individuals who fail to demonstrate the required standards.”
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Readers' comments (9)
Mr Smug | 3 Aug 2011 11:43 am
At last - the FSA appears to be doing its job.
This is what we need from a regulator - simple, targeted enforcement on cowboys.
We don't need lots of extra rules that increase our costs and those that we pass on to our clients.
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Anonymous | 3 Aug 2011 11:58 am
Perhaps i am annoyed at the wrong thing here. would OF incurred a fine of £60,000.00? The degradation of the language continues unabated. This is all the more galling when the writer then proceeded to quote the FSA who used the correct vernacular. I despair!
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Alan Lakey | 3 Aug 2011 12:20 pm
If the FSA carried out its invetsigatory function in a proper considered and disciplined manner the RDR would be a non-starter.
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Nick Bamford | 3 Aug 2011 12:36 pm
@anonymous 11.58
i rather than I, lower case w at the start of your second sentence, yes you are annoyed at the wrong thing!!!
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Danny Christ | 3 Aug 2011 1:05 pm
Nick, Excellent!!
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Robin Seymour | 3 Aug 2011 1:45 pm
Terrified of using incorrect grammar, spelling or syntax, or is that the same thing?
Anyway, surely there is a plus and a minus, firstly its great that this bod is out of the business, sadly the FSA missed out on a fine, the FSCS bill will fall on the rest of us as the firm has gone to the wall.
Surely they should have had Capital adequacy in place and perhaps in the case of default the directors should be liable for this amount?
The FSA bill and FSCS bill is big enough already, there must be a mechanism is place that stops the bill from mopunting further or eventually we will not be able to afford the regulator.
Finally, please stop the ability to post comments anonymously
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Harry Katz | 3 Aug 2011 3:13 pm
@Mr Smug
Not that I disagree with you but one wonders why so many are against the FSA proposal for individual complaints reporting.
I would have thought that this is exactly what the industry requires in order to get shot of the cowboys.
As far as human rights are concerned I don't see how this chimes - what about complaints reporting for firms or indeed sole traders? Are their human rights different? Moreover what about the human rights of those who behave suitably but are besmirched by those who don't?
There are some who would criticise the FSA even if they declared a public holiday.
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gerry roberts | 3 Aug 2011 5:17 pm
wheres Mr Wells and his anonymous chums to repaet their favourite mantra. "Shut them all down!, all IFA`s, CMC, solicitors etc are crooks and rogues". BTW I agree, that if you are not prepared to show your name and hide behind"anonymous" you don`t have a say. What are you scared off? Oh, regarding spelling etc, it does not matter in todays world, it is outdated and cumbersome.Not unlike your industry chaps.
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Harry Katz | 4 Aug 2011 10:27 am
@ Gerry
" …regarding spelling etc, it does not matter in todays world"
May I please correct the sentence as it rather grates?
“…regarding spelling etc., it does not matter in today’s world”
Not only ignorance but laziness – modern spell checkers can correct spelling, grammar and punctuation.
I guess I must just be an old fart, but that it the saddest most lamentable comment I have seen for a very long while and rather underlines what is wrong in this country today.
A land fit for morons.
PS. Who is Mr Wells? I don’t see him here.
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