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Adviser wins FCA complaint battle over ‘misleading’ register info

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An adviser has won a complaints battle against the FCA after it failed to correct “misleading” information on its firm register.

The adviser complained to the Complaints Commissioner on behalf of the appointed representative after two initial complaints to the FCA were not resolved.

The complaint related to the Financial Services Register showing a former trading name of the AR, which was suspended, without making it clear that the AR no longer had any association with the suspended firm.

The adviser was concerned consumers would think the AR was suspended and decide not to do business with her and it was unlikely they would click through to find out when the suspension applied.

The FCA did not remove the entry when it was asked in November. The adviser then complained to the regulator but the problem was still not solved.

In its original response to the complaint, the FCA said: “I note that the reference to the suspensions does not appear next to the actual name, which appears in the first column with the hyperlink. I am satisfied that on review of the record of the firm an average reader would be able to distinguish between the current and previous trading/brand names of the firm.”

However, Complaints Commissioner Antony Townsend upheld the complaint, saying it was not clear the trading name was no longer used.

Townsend says: “At face value, it appeared to be a current trading name. A consumer would have had to look deeper into the information about the AR in order to establish that the suspended trading name is a former one. Not all customers may go into such length when reviewing a financial adviser’s standing with the FCA.”

He adds: “While I accepted that the FCA entered the information on its register in good faith, the fact is that the way it was displayed was obviously misleading, and the FCA did not correct despite being given two opportunities. I am pleased to see that the regulator has now accepted this position and has taken steps to rectify the matter.”

The FCA has amended the register and must pay £500 to AR for distress and inconvenience. Townsend also recommended the FCA pay £5,839 to the AR for loss of business, however the regulator has not accepted this recommendation.

In its response to the commissioner’s report, the regulator says for compensation to be appropriate, it should be shown that financial loss was a result of an error by the FCA.

The regulator says: “In considering our response, we took into account that other parts of the entries for the complainant were clear and correct. Under the ‘status’ column, the complainant was shown as a current appointed representative, from when her relationship with her current principal started, and was shown as an ‘active’ approved person. A prospective client may well have paid more attention to these ‘status’ entries than to those under the ‘names’ column. We also noted that the source of the complaint was the compliance specialist at the complainant’s principal firm, rather than, for example, a prospective client or a product provider firm using the FCA’s Register Extract Service.”

The regulator has also taken into consideration the period of time the appointed representative could not carry out regulated activities and the time it would take to re-establish client relationships once she returned to the market, suggesting that she might not have generated as much income on her return as she had previously.

On the way the register is set up, it adds: “The register holds hundreds of thousands of entries for firms and individuals. Robust processes have been designed to remove the risk of errors occurring. Correcting these matters should not, however, create an expectation that substantial compensation will be available where errors occur.”



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. That’ll be £6,339 of OPM, so what does the FCA care?

  2. Presumably enough to refuse to fork out that Commissioner recommended £5,839 part of it in respect of loss of business.

    I have no idea if the complainant has taken this FCA refusal further, but whilst it is unusual for FCA to decline to honour the Commissioner’s recommendations and it must by law publish any such rebuttal to them as indeed it did in this case, I wonder how that refusal would stand up in Court especially given that the Commissioner recommended it?

  3. Several comments posted here seem lately to have disappeared; is there a reason for that?

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