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Committee rules against FSA rejection of ex-Park Row adviser

The FSA’s Regulatory Decisions Committee has overturned the regulator’s decision to deny reauthorisation to a former Park Row adviser.

Money Marketing understands the adviser, who does not want to be named, must now reapply for authorisation and the FSA cannot take into account its previous concerns in considering the application.

Money Marketing also understands that at least 20 former Park Row advisers are still waiting to gain FSA authorisation more than a year since they first applied to be reauthorised. These IFAs have been unable to advise their clients in the interim period.

Another ex-Park Row adviser, who does not wish to be named, received authorisation from the FSA last week, days before his RDC hearing was due to be held.

He has so far spent £10,000 in legal fees fighting his case. He says: “The FSA is a bully. I have had to remortgage my home to survive as well as pay off four hard-working guys and endure a torrent of abuse and unfounded and unwarranted allegations from the FSA.”

The RDC hears appeals against enforcement, authorisation issues and supervisory decisions that are of “material significance for the firms and individuals”.

The RDC is a committee of the FSA board and reports directly to the board.

Foot Anstey Solicitors associate Alan Hughes says he knows of three advisers who are unconnected to Park Row that have taken authorisation cases to the RDC and won.

He says: “It almost seems like the FSA is bullying people by withholding authorisation. But if advisers stick to their guns and go to the RDC, they can be successful. In my experience, the RDC, which has the choice of taking away someone’s livelihood or not, has to be convinced there is something seriously wrong to take away an adviser’s authorisation.”

The FSA refused to comment on individual cases.

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. members of the RDC committee need to watch their backs now!!

  2. “The FSA refused to comment on individual cases.”

    It doesnt stop them when they have won a case!

  3. The only way to deal with a bully is to stand up to them.
    I urge everyone to get on and lobby your MP before the RDR debate on 25th Nov
    (unless your unlucky and your MP happens to be Mark Hoban)

  4. Is it not more aparent that the FSA are simply not treating their customers fairly.
    Would the FSA allow us to take a year to deal with a complaint, NO is the answer. so why are they allowed to take a year to re authorise someone??.
    I would go for a legal battle on restriction of trade and lost income.
    They are taking weeks to authorise people as well. This is people’s livelyhoods they are simply abusing due to their incompetence.
    TCF ha ha ha
    Absolute disgrace.

  5. IFA Defence Union 11th November 2010 at 9:50 am

    We have tried to reason with them but we really must sort this rabble out once and for all.

  6. Hector, are you proud of your regulators?

  7. Pension man, they don’t have to ‘win’ a case to publish derogatory comments about authorised persons. The FSA just shoots first and then relies on it’s unlimited funds to bully as many as possible into submission.
    Perhaps they should be required to publish details of all cases where they ‘lose’ with names of the FSA personnel who took the ‘wrong’ decision in the first place. Compensation for loss of earnings, loss of reputation and payment of all fees associated with the appeal should be a given and this money should come from the FSA ‘Bonus Pool’.

  8. “The FSA refused to comment on individual cases.”

    Okay ~ so how about commenting on why you’ve been deliberately and perniciously dragging your heels with reauthorising virtually ALL the former Park Row advisers?

    The FSA is a sick and sickening monster.

  9. IFA Defence Union 11th November 2010 at 11:08 am

    Same principle applies to pulling permissions for not attaining retrospectively applied qualification requirements?

    Regulators must look before they leap.

  10. Most of the time the FSA just go after the easy targets and forget that people earn a living in this games, I have been visited by the FSA to review my cases and they were picking on silly errors like grammer etc one case they argued that based on the file the Client wouldn’t understand the risk he was taking I agrued the fact that he does they wouldn’t accept that so I asked the FSA guy to ring him up there and then to ask his understanding, the FSA guy declined and moved onto another case,.

  11. It is well overdue for the FSA to be shown for what they are, Bully’s. Sack the lot of them and use the money they waste to support the IFA instead of purposefully going out of their way to destroy the IFA community.
    Lets have a live debate Sants!

  12. I agree with all the comments above and I’ve discussed the FSA with many people over the years and their unwarranted and unjustified stance and attitude towards advisors.

    I recall a visit from the FSA where 3 individuals who I suspect where just out of training reviewed 20 of my firms files and had did not understand the majority of products they were employed to review.

    One member pulled up a case where I had advised on 2 separate single life policies rather than a joint policy as bad advise!!!!! and couldn’t understand my reasoning and justification for recommending this – once this was reviewed by a more senior member of the FSA back at base it was dropped and not mentioned again!

    I feel sorry for the Park Row guys who done nothing but adhered to their networks Systems & Controls and Compliance and have been left high & dry by the network and FSA.

    No other proffesion within the UK would have the same body in charge – could you imagine the NHS, Police Force, MPs, and just about any other profession having to put with the FSA!

    IFA’s are not the ones causing all the complaints and problems – the banks are!

  13. What a world we live in;

    Orwell wrote it,
    Bowie sung about it,
    & Hurt & Burton stared in the film.

    Or for an updated view (1 year later) see Gilliam’s Brazil.

    From which we need to model ourselves on Tuttle, the tricky bit is how?

  14. I would love to know what AIFA’s view is of this debacle? Their silence is deafening.

  15. I’m delighted that the RDC are coming to these conclusions and hopefully this will filter through to the RTC for those of us that are still awaiting authorisation.

    I have no issues with my files being reviewed and would welcome guidance from the FSA as to any improvement in record keeping, however, what I do object to is the retrospective checking that has taken place and the FSA’s blinkered views on the data being supplied to them by KPMG, i.e.

    Structured products being checked using an FSA template issued in October 2009 – any file with more than 10% (even if 10.01%) invested into a single counterparty is deemed to be unsuitable. It is my understanding that the grading on these files are being re-considered before customer contact offering redress (over 6 months from when the original file failings were sent to the FSA) as the PI insurers are (not surpisingly) not prepared to pay redress.

    “Excessive” asset concentration in (mostly) commercial property funds. After several months of asking what was deemed to be “excessive”, the following response was given by KPMG:

    “As a general principle, we usually consider as unsuitable an adviser recommending more than a 50% investment in Property funds for a particular investment … Furthermore, where a customer file demonstrates experience of investing in a broad range of assets, we will calculate the overall percentage in Property in determining suitability. Where this is evident, generally any amount in excess of 25% of overall assets will be considered unsuitable. Bearing in mind the above, this does not mean that a customer holding around 25% of their overall assets in Property will automatically be considered suitable. This is on the basis that some tolerance has been built into the calculation and ideally a customer should not have more than 15-20% of their overall assets invested in Property” – work that one out if you can!

    What is more frustrating in all of this, is that at no point during my time with them, did Park Row give any of the above guidance regarding the above asset concentration percentages. Indeed switches were made out of property funds at ongoing client reviews – KPMG viewed this as an admittance that I had mis-allocated in the first instance!

    The FSA has clearly found issues with Park Row’s procedures and it is WRONG that they are treating advisers this way (it is also considerably more than 20 advisers that are still waiting for re-authorisation).

    I also instigated the FSA’s Complaints procedure on 17th March 2010, and received a final response on 14th July 2010. They basically acknowledged that they had breached their statutory deadline (and apologised). It went on to state “PDR identified the risk that it may breach this statutory deadline, but it considered that the implications for breaching a statutory deadline were outweighed by the potential risk to consumers that may result from allowing unfit and improper advisers to be allowed back into the industry, especially given that the primary concern about Park Row was regarding suitability of investment advice given to consumers”.

    The FSA also confirmed in this letter that they had not denied me the right to earn a living as this only related to regulated activities – to me this inferred that it would be fine to advise on unregulated products to earn a living … we all know the implications of that!

    Although I have been unable to give advice for 12 months (after 31 years in the financial services industry), which has placed considerable personal and financial stress on both me and my family, the biggest losers here are my clients, which the FSA appears to have lost sight of.

    How can an adviser be fit & proper one day and not the next. I’m delighted that some advisers “slipped through” the FSA net and were authorised immediatley, however, if the FSA are so concerend about the quality of ex-Park Row advisers why is it that these advisers are not being subjected to enhanced supervision?

    Some consistency from the FSA would be nice, and as an aside neither the PFS or IFP have shown any support for our plight.

  16. Well done the RDC for taking the logical decision and good luck Richard, I hope your case now comes to a speedy conclusion. I also trust that the FSA will now realise there is no need to keep dragging their heels and start to authorise all the other advisers who have a Park Row background as the mention of Park Row seems to set alarm bells ringing no matter how long ago you worked for them.

    This is not the end of the matter though as all the Park Row advisers will still have the concern that they will be chased for some of the redress based on flawed assessments by KPMG and inadequate controls and processes imposed by Park Row. I am sure all the ex-advisers must be wondering what their payaway to Park Row was for as no one could have envisaged the mess that this has become where it seems that the only people missing out are the advisers and the clients. Surely Park Row must have been in breach of their contract as they have not provided the standard of service which the adviser expected and therefore how can they or the PI company chase the advisers for excess on a situation which was of Park Row’sr own making.

    Watch this space. Redress has not been calculated yet, and when it is, wait for them to try it on. All advisers need to stick together and refuse point blank to accept any claim against them.

  17. This sad case proves the truth of the old saying: “Power without accountability is extremely dangerous”.
    Thank goodness there is a Regulatory Decisions Committee. Without it the nightmare that these individuals have suffered would have been even worse.

  18. Neil F Liversidge 13th November 2010 at 2:59 pm

    The current backlog of authorisations is horrendous. People are being unfairly denied the oportunity to earn a living. The whole matter could and should be totally simplified when an adviser moves firms. All that should be required for reauthorisation is a reference request from the FSA to the previous firm with one question: ‘Do you know of any reason why this person’s authorisation should not continue? If so state it.’ Where the firm has ceased to exist the personnel records should be taken over by the FSA so it can answer its own question, and/or answers should be sought from the former HR officer. All the fuss made by the FSA over mortgage affordability and income verification is so much cant. How can they profess to care when they are clearly happy to see advisers unable to earn at risk of losing their homes as a direct result of the FSA’s own inaction?

  19. A number of my former team members from Park Row are waiting re-authorisation, but what has happened to all of those who could not afford to wait this long? Clients and the Industry have lost high quality advisers, the Revenue have lost income from those Advisers earnings and why, because some junior members of KPMG are using an inadequate and incomplete review process to check boxes with NO regard to the wider picture (and I know because they have reviewed some of my cases). If Dave and Nick want to slash unnecessary spending, an excellent place to start would be to disband the FSA!

  20. My IFA is ex-Park Row and is still waiting to be authorised yet colleagues of his who left Park Row just days before were able to get authorisation with their new firms. He thought he was doing the right thing staying with Park Row to the end but his livelihood has been taken away from him for over 12 months now in effect.

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