The FCA has fined an IFA firm £20,000 over unsuitable advice to invest in Keydata products.
The regulator found that clients of John Joseph Financial Services invested a total of £6.1m in Keydata products between August 2005 and June 2006.
The FCA says the firm failed to adequately diversify clients’ portfolios and failed to disclose the associated risks of this.
The regulator says John Joseph Financial Services also failed to disclose the material risks of investing in Keydata, and in some cases did not disclose the risks at all.
Many of the clients were approaching or in retirement so found it difficult to rebuild their investment portfolios.
The firm was also found to have weak systems and controls, which the FCA says affected fact finding, advising, disclosure of risks, and recording and monitoring of sales.
Since Keydata’s collapse, John Joseph Financial Services has helped clients obtain redress and tried to secure ex gratia payments for clients from the firm’s professional indemnity insurers.
The firm has also set up a group to bring legal action in the US to recover assets for Keydata investors, which is funded at the company’s expense.