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FSA cracks down on banned advisers still offering advice

FSA Letters 480

The FSA is cracking down on banned advisers believed to be continuing to give advice.

The regulator has announced details of two separate investigations into unauthorised business carried out by banned individuals.

The first investigation relates to Gary Hexley and John Cooper, Hexley’s business partner. The FSA has charged Hexley with six offences relating to investment advice given whilst unauthorised.  Hexley is banned from performing any function in relation to any regulated activity in the financial services industry.

He has been charged with carrying on a regulated activity without being an authorised or exempt person, and five counts of dishonestly concealing a material fact.

Cooper has been charged with three counts of dishonestly concealing a material fact. Hexley and Cooper have been bailed to attend Birmingham Magistrates’ Court on 26 October.

In a separate second investigation, the FSA today executed a search warrant with the help of Kent Police at an address in Kent in connection with an investigation into mortgage advice given by a banned individual.

A 64 year old man was arrested on suspicion of committing offences under the Financial Services and Markets Act. No-one has been charged at this stage, and the FSA’s investigation is ongoing.

Yellowtail Financial Planning managing director Dennis Hall says: “I do not think the FSA really has its finger on the pulse when it comes to people purporting to be advisers when they are not. And if providers do not have a record of bans or do proper checks, this is when unauthorised business slips through.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. I thought banned advisers were too busy running CMCs to be bothered about mortgages again

  2. TWO investigations – wow!
    Wait until January 1st, there will be so many unauthorised ‘introducers’ giving advice, the FCA will not stand a chance. Even the ‘man in the pub’ will be overshadowed by the volume of ex advisers passing on more than just a name and phone number!

  3. The line between financial advice (regulated) and financial guidance (non-regulated) is very very thin. Look at MAS if you want a good example!! There are some very clever people out there working out exactly what they can do, unauthorised, post December. The FCA will struggle with this monster of the foolish FSA’s making.

  4. @Soren – I’m sure they’d be quite able to do the same pre-RDR if they so wished.

    I keep banging the drum about disclosure being the main issue when if comes to many of the issues I think our profession face.

    Disclosure in terms of whether advice is being given (or not) and where advised, the nature of that advice.

    In my 12 or so years as a financial adviser, I’ve probably only had 2 or 3 clients question me about the precise nature of the advice I give and no one has ever asked for proof of my authorisation / qualifications etc.

    I have come across many potential clients who are holding investments which are not suitable for them or they are being recommended such investments – and when I ask the individual whether they’ve checked the regulatory position of the firm who has contacted them and whether they are benefitting from advice they are (unsurprisingly) clueless…..

    This for me is a major issue…… and RDR won’t resolve it.

  5. @ Paul Stocks

    And what about robust disclosure of status – restricted or Independent?

    The resticted guys are going to run a coach and horses through the weak disclosure requirements.

    I can see the FCA chasing their tails for years.

  6. Why not some one like Martin Lewia? 24th October 2012 at 3:15 pm

    I totally agree with Paul Stocks comments above and the FSA needs to spend more time on publicising what authorisation for advice actually means. It is okay going around banning advisers but the general public have no idea what authorised advice and indeed what the FSA register means. Maybe instead of spending our levy income on useless adverts for MAS surely they should be publicising the SPS certificates and what authorised advice actually means and the protection it gives to the consumer.

    I welcome the fact that the FSA is eventually going to crack down on activities of people that do not carry authorisation this is well overdue and maybe they would like to start with high profile cases like Martin Lewis for example. A really don’t understand how individuals who run websites can give information on regulated products and benefit from pay per clicks and get away with activities like this without holding authorisation or been investigated by the FSA for these activities. So come on FSA or FCA do your job for a change and protect authorised individuals from what I call rogue traders even if they are deemed to be celebrities.

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