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Director is fined for failing to disclose concerns on adviser

The FSA has fined a director of a Cornish IFA for not disclosing information about the quality of one of his advisers.

Newquay Investment Services director Christopher Davies was fined £17,500 for not informing the FSA he knew of important information about an adviser he had employed, who the regulator says posed a risk to customers due to a history of recommending unsuitable mortgages.

After Newquay had applied for the adviser to be confirmed as an approved person last year, the adviser’s previous employer and a representative of its network contacted Davies alerting him to concerns about the adviser’s business ethics and methods in his previous role. A reference from his previous employer revealed the adviser had eight complaints lodged against him, of which one was upheld and seven were still being investigated.

The FSA says Davies raised these concerns with the adviser and concluded he had lied to him about why he had left his previous job. Davies failed to disclose any of this information to the FSA.

Davies investigated the mortgages written by the adviser while at Newquay and found he had submitted a fast-track application without any proof of income despite the customer being self-employed. He banned the adviser from writing self-cert mortgages but allowed him to write life and other business.

FSA director of enforcement Margaret Cole says: “When Davies became aware of the later adverse information relating to the adviser, he should have immediately informed the FSA. The fine indicates that the FSA takes a serious view of such failings and serves as a deterrent to directors of regulated firms from acting in a similar way.”

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