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FCA adviser investigations increase by 44 per cent

The FCA is investigating 46 financial advisers and mortgage brokers for enforcement action, Money Marketing can reveal. 

This is 44 per cent more than the 32 advisers and brokers the regulator was investigating a year ago.

Responding to a freedom of information request submitted by Money Marketing, the FCA says it is investigating 40 individual financial advisers or firms and six mortgage brokers. The enforcement actions relate to misselling and customer care, integrity, fraud and unauthorised activities.

The number is up significantly compared with a year ago, when Money Marketing revealed the regulator was investigating 29 advisers and three mortgage brokers.

The FCA says the figures relate to only formal investigations referred to enforcement and not supervisory visits or supervision enquiries.

There are 21,881 authorised financial advisers, according to the latest FCA figures published in January.

Apfa senior policy adviser Clare Griffiths says: “This may be evidence of the FCA developing its more proactive approach. When it took over from the FSA, the regulator said it would nip problems in the bud before they develop and, assuming these investigations uncover real problems, that is to be welcomed.

“If firms are carrying out unauthorised activities we would be pleased to see them dealt with appropriately. Hopefully this approach from the FCA will lead to reduced consumer detriment and fewer claims falling on the Financial Services Compensation Scheme.”

Informed Choice managing director Martin Bamford says: “These actions will be of varying severity and without knowing the details it is difficult to know what the impact will be on the rest of the industry.”

The FCA’s annual report, published last month, shows it imposed 46 fines worth £425m in 2013/14, its first year of operation. This compares with 51 fines worth £423m under the FSA in 2012/13. The FCA also imposed 26 prohibitions in 2013/14, down from 43 in 2012/13.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. APFA’s comment is rather astonishing.

    It is the role of Supervision to “nip matters in the bud” as it were, and even then, its work is quite tortuous.

    Referring a firm to enforcement is very much an ‘after the event’ method of inflicting punishment and pain. Indeed, though many of these enforcement investigations are discontinued, the punishment is often in the process. Referring individual advisers to enforcement is, well, more down to the ease with which those individuals can be squeezed rather than a function of their actual misconduct.

    At the risk of a bit of a plug, anybody in this level of hot-water needs a good level of representation, advocacy and expert input.

  2. Clients who have been conned out of their savings and their pension funds should watch out. Over the past couple of days I have heard of two ordinary people, in their seventies, who have just discovered that their adviser mislead them about the risk profile of investments that he recommended.

    When they confronted him, he effectively told them to get lost because the time limit taking action has been passed. They are devastated because a big chunk of their SIPP funds have disappeared.

    Totally outrageous and unjust. The Government must immediately do something to correct this and backdate it . A good start would be to change the legislation to 10 years.

    It is ridiculous that bent IFAs can rip off their clients and ruin their old age and get away with it if a short period of time passes.

  3. A 44% rise on a tiny number is hardly a cause for concern. I think it shows that adviser firms really have got their house in order to a good degree.

    Now we can look forward to the regulatory dividend promised to us all those years ago!

    Dream on!

  4. An increase of 14 simply doesn’t create a big enough headline, lets create a tabloid style sound bite of 44%, probably a good number are still the residue from a year ago as it doesn’t fully breakdown the reasons for the enforcement.

  5. Tony Brown, Your comment is very sad and if you were a regular reader of these blogs you would be aware that there is no time limit on IFA complaints. IFA’s can be pursued to the grave so your acquaintances need to put in formal complaints as quickly as possible.

    I think this comment shows the big problem with our regulatory system. The advisers that are honest anyway give good advice and tick all the boxes. Arguably they don’t need regulating, their own ethics do it for them. The dishonest advisers just lie and tick the boxes anyway. The regulatory system misses them because all the right boxes have ticks in them and they tell clients they can’t complain.

  6. @Soren – Notice Tiny;s example is someone with a “SIPP”. Highly likely that the “adviser” wasn’t regulated and nor was the offshore hotel complex in it as an investment.
    As a firm we have about 3 clients who use SIPPs for what they were designed i.e. holding more unusual products for which a SIPP is necessary and in these 3 cases they are ALL commercial premises which their businesses work out of. Any other SIPPs have simply been because the provider only realistically offers SIPPs for new business and not PPPs (I.e. AEGON ARC and Standard life) all other client plans are either standard PPPs or stakeholders although we have gradually reduced usage of stakeholders as clients have moved towards the need for drawdown and/pr something a stakeholder can’t do.

  7. Again this just highlights a very serious point (assuming Phillips point above) I think the FCA are not protecting the consumer enough and seriously lacking in their duty by not promoting the protection you get and the virtues of using fully qualified regulated advisers and in the main regulated investments !!!

    This I am afraid will happen more and more, purely and simply because, people either don’t know how to distinguish between the two or they are not asking the right questions.

    BEWARE !!! un-regulated advisers and un-regulated investments !!!!!

  8. DH is right, the FCA is not doing enough to protect customers. Simply ask every IFA for a list of unregulated product sales and you have your top list of dangerous IFAs that need attention. The FCA have not asked for this because they know what they will find and the compensation due to customers would break these firms. IFAs who complain about frivolous complaints and long stops are probably worried about something – stop complaining and support the FCA by telling it to get on with its job and take these people out of the profession.

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