View more on these topics

Financial Ltd boss defends client service in FCA ban appeal

charlie palmer
Financial Limited chief executive Charlie Palmer

Customer care was “at the very heart” of troubled adviser network Financial Limited, founder Charlie Palmer’s lawyer has claimed as he attempts to overturn an FCA fine against him.

In December 2015, the FCA said it wanted to ban Palmer and fine him more than £86,500 for allowing appointed representatives of Financial Limited to give potentially unsuitable advice.

40,000 clients were put at “significant risk”, the regulator said.

The registered individuals in Financial Limited – which numbered 516 at their March 2011 peak – were allowed freedom and flexibility on a “light touch” basis, as opposed to following a tight centralised compliance process.

The FCA says the potentially unsuitable advice that followed involved high risk products such as unregulated collective investment schemes.

At his appeal of the fine in the Upper Tribunal yesterday, Palmer’s lawyer Guy Phillips QC said clients were front and centre of Financial Limited’s approach.

Phillips said: “Treating customers fairly was at the very heart of the business that Charlie Palmer created.

“This was a compliance business. The essential service offered by the firm to its members was assistance with regulatory compliance.”

Phillips cited a number of examples where Financial Limited had noted the significance of consumer outcomes.

These included a risk director’s report that said “consumer protections is the most important part of our work”, an early 2012 risk review that said management information to the board would be improved with a consumer focus, and an email from Palmer to Financial Limited’s chairman that said he wanted to move from an advice to a consumer led organisation.

The firm also put the risk of advisers giving unsuitable advice to clients at the top of a list of serious business threats in 2010.

Phillips said: “A business which is not concerned with treating customers fairly does not allocate the highest score to that particular risk.”

The FCA’s legal team noted that, as part of marketing materials, Financial Limited had used the lack of restrictions in their model – which included not having a panel of pre-screened investments and allowing advisers to follow their own business processes – as a key part of its pitch to get advisers to join under the tag-line: “maximum assistance minimal interference.”

In an interview with Money Marketing last year, Palmer revealed the Financial Limited board had decided on a “2 per cent error rate”; that is, that they were willing to accept one case of misselling in every 50 investment decisions.

Palmer was previously investigated by the FSA in 2009 and fined £49,000 in 2010 over the risk of unsuitable pension switching advice.

Phillips said that in a skilled person report into the firm’s activities, professional services firm Smith & Williamson had said that Financial Limited’s compliance function and management information presented to the board had “changed significantly” since the FSA’s visit.

Reviews into unregulated collective investment schemes and pension switching are ongoing, conducted by parent company Tavistock Financial, which acquired the Financial network in February 2015.

Recommended

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg

Failed network Financial Ltd faces £90k in claims

Bankrupt advice network Financial Ltd is facing £90,000 in claims that are being handled by the Financial Services Compensation Scheme. The company’s liquidators Moore Stephens published documents on Companies House that show two claims were made against Financial Ltd to 4 July 2016 with the FSCS listed as the contact address. The first claim is […]

charlie palmer
10

‘One in 50 cases missold is acceptable’: Ex-Financial Ltd chief Charlie Palmer opens up

Former Financial Ltd chief executive Charlie Palmer has defended how he operated the troubled business, including a board policy anticipating one in 50 clients would experience misselling. In an interview with Money Marketing he gives his side of a story that saw the network face the full force of the regulator’s microscope and eventually be […]

FCA logo glass 620x430
8

‘Maximum assistance, minimum interference’: FCA lays bare Financial Ltd risk failings

Former Financial Ltd boss Charlie Palmer built an advice network that treated advisers as the end customer and failed to heed warnings about potential suitability risks, the FCA says. The regulator has today issued a decision notice against Palmer for failing to ensure appointed representatives gave suitable advice to around 40,000 clients. It also wants […]

Can you put a hat on?

By Sarah Scott, marketing consultant You might think the question in the title is a strange one. Perhaps even more so when you learn that it’s one of several asked as part of an assessment for Employment Support Allowance eligibility in the opening scenes of the 2016 film, ‘I, Daniel Blake’. Daniel is a carpenter […]

The fifteen-year itch

By Neil Jones Technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The treatment of non-UK domiciles that are resident in […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. His newsletters used to actively promote a hands off approach to compliance, suggest sticking two fingers up to the regulator and were littered with bad language. How he has the temerity to suggest his business was about compliance (unless it was about the avoidance of compliance), is beyond me,

  2. I miss his funny videos.

  3. I wonder if t is at all possible to discover how much FSCS claims have been accrued under his leadership and acceptance of 1 in 50 fail rate.
    If he has been fined and thought it still makes good business to ignore the warnings then he deserves all he gets and then some. Was this a case of Mr Palmer thinking £49k is irrelevant if profits are significant and the industry is actually paying for his follies in compensation claims?
    This also raises questions over why he was fined such a significant amount and yet it has taken such a long time for the FCA to actually ban him…..glad to see the regulator is becoming more effective and I hope a common sense approach to manipulators will be forefront to future decisions…we could have certainly all benefited from such an approach in the past.

  4. He is now running a compliance consultancy for IFA’s. Absolutely unbelievable that somebody as incompetent as Mr Palmer has been shown by the FCA bans and fines to be, can be alowed to impart his wisdom and knowledge on other IFA’s.

  5. Wow Charlie – all those buzzword throwaway statements in your internal documents professing the primacy of client outcomes. And they still found against you?

    Whats a man to do!?

  6. Worked for this outfit for a number of years found the compliance regime to be tough having to achieve certain licences in each category of business before being found competent. Charlie Palmer meant well and shame on the FCA they had a lot of there rules and regulations in Financial from 2009 following various visits so they can also be classed as incompetent.

    • Ermm…..having to acheive licenses or pass internal tests is and shoUld be pretty much par for the course for any network. Its CPD really. There’s too many doddery old IFAs who passed G60 et al years ago and havent got a clue about things these days.

      On second read – youre being sarcastic arent you. ARENT YOU???

  7. I met Charlie Palmer a couple of times and he always seemed a pretty decent chap and I had the impression he put the firms clients and their advisers before the F-PACK rather than F-pack, then client then adviser and that is where the failure (if it is one) was in not recognizing that the F-pack believe their interests and political machinations to be above the needs of clients and advisers.
    Charlie Palmer and Financial paid the price while senior bank staff walk away scot free at a cost to the shareholders and now an ongoing cost to the rest of the UK who are STILL paying for the bailed out banks.

  8. Out of the FCA claim of – 40,000 clients were put at “significant risk” – , I wonder how many actually had a substantive claim?

  9. Having worked as an IFA through various networks and large insurance companies and banks i am in a position to attest that the financial compliance regime was very stringent and customer led. The issue was that advisers were deemed to be fit and proper – honest and good – they took advantage of the freedoms available. Financial treated advisers like they were trustworthy. That was their mistake.

  10. Marc, I agree

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com