The FSA has banned a director of an adviser firm after the company advised clients to invest a total of £9.7m into unregulated collective investment schemes.
In November 2011 the regulator issued decision notices against Bath-based IFA Pave Financial Management and its directors Timothy Pattison and Stephen Hocking over unsuitable Ucis sales. It sought to ban both directors and fine Pattison £90,000.
Pave, Pattison and Hocking referred the matter to the Upper Tribunal. Following the death of Pattison before the hearing had taken place, Hocking decided to withdraw his Tribunal reference.
The FSA has now issued a final notice against Hocking banning him from any regulated activity due to a lack of integrity and a lack of competence. Pave, which was declared in default by the Financial Services Compensation Scheme in May, has also had its regulatory permissions cancelled.
The regulator had wanted to impose a £25,000 fine on Hocking, but in light of evidence the penalty would cause him serious financial hardship has decided to publish a statement of his misconduct instead.
Hocking was approved to act as an adviser between 1 November 2007 and 4 August 2010, and was approved as a Pave director between 10 June 2008 and 4 August 2010. The FSA says he acted “recklessly” in his advice to clients, and gave unsuitable recommendations to disinvest from existing products and to invest in Ucis.
One client was advised by Hocking to remortgage his home to raise funds to invest in Ucis and to transfer out of an existing pension scheme, despite advice to the contrary from Pave’s pension transfer specialist.
In another case, a vulnerable elderly client was advised to surrender six of her eight bonds totalling £885,000 and to reinvest the proceeds including a total of £680,200 into two Ucis funds.
The FSA says: “Stephen Hocking lacks integrity and the competence and capability to perform any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm.
“If Hocking performed any functions he would pose a serious risk to consumers and therefore it is necessary and proportionate to prohibit him from performing any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm.”