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FSA fines Derbyshire firm £97,600 over Ucis failings

The FSA has fined Derbyshire firm Topps Rogers £97,600 for failings related to its unregulated collective investment schemes.

The fine was imposed for failings relating to the FSA’s management and control and relationship of trust principles.

It has also cancelled its Part IV permission, meaning the firm is no longer directly authorised.

According to the regulator, Topps Rogers conduct fell below the “standards and requirements of the regulatory system”, specifically those in connection with its investment business between 2004 and 2010.

It says the firm failed to take “reasonable care to ensure that its recommendations relating to Ucis were suitable for its customers”.

The regulator says there were a number of failings relating to the promotion and recommendation of Ucis.

The firm was also alleged to have failed to put adequate compliance arrangements in place.

The regulator claims the firm promoted and advised 94 customers to invest more than £12m in Ucis, directly or through a Sipp or wrap platforms.

“A number of Ucis that Topps Rogers’ customers invested in have been suspended or wound up, resulting in potential financial losses for customers,” the regulator reports.

“The situation was aggravated by the fact that customers were advised by Topps Rogers to invest large proportions of their investment portfolios in Ucis. In some instances, customers were not aware that they had invested in Ucis or of the associated risks.”

The regulator had earlier withdrawn the approval of Martin Rigney, “the only adviser and partner” at Topps Rogers, prohibiting him from performing any regulated activity “on the grounds that he is not a fit and proper person”, which has been deferred to the Upper Tribunal (Tax and Chancery Chamber).

Rigney had been approved to perform a number of functions since 2002, with the firm having voluntarily modified its permission to stop arranging new business connected with Ucis in 2009.

The firm later varied permissions to prevent it from carrying on any of the regulated activities in its permission in 2011, before it was put into liquidation later that year.

The fine consists of a punitive element of £70,000 and disgorgement of financial benefit of £27,600, relating to commission payments on “obtained by Topps Rogers for arranging eight unsuitable Ucis sales”.

The full notice can be found here.


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. So … these products are called UCIS and the U stands for Unregulated, … Unreliable, … Unprofitable …. yet clients who know nothing still buy them …. Unbelievable!!

  2. Mr Trenner

    I think the issue is more that clients are sold these things rather than them simply buying them.

    Why would any adviser risk their career and reputation flogging these things? A quick buck?

  3. We're all doomed!!!!! 15th February 2012 at 3:46 pm

    There are several of these schemes cropping up now. Many of them involve investing in speculative property developments in the third world, together with promotion of the idea that a client can invest their pension pot, which they might not be happy with the performance of, into a SIPP, which allows for investment into such a scheme.

    The idea that the development is going to perform exceptionally well is also heavily promoted.

    I’m sure many ordinary investors have been duped in this way, rather than the sophisticated investors that UCIS’s are permitted for.

    Advisers should be very wary of receiving introductions from these “get rich quick” brigade, who are usually ex-mortgage advisers or packagers, who have found that debt management hasn’t been the panacea to their problems

  4. David Trenner - Intelligent Pensions 15th February 2012 at 5:03 pm

    So … these products are called UCIS and the U stands for Unregulated, … Unreliable, … Unprofitable …. yet IFAs who know nothing still sell them …. Unbelievable!!

  5. From the FSA notice:

    “5.26. … In fact, Topps Rogers promoted at least two products in the erroneous belief that they were UCIS.”

    These fools didn’t even know what they were selling…

  6. David Trenner’s and Adam Smith’s comments sum it up.

    Believe me I hate to give any credit to the FSA’s RDR agenda but if it stops regulated individuals flogging something they do not understand then GREAT.

    Where do we start, Arch Cru, Keydata, UCIs Split Capitals, etc etc etc

  7. Darren, RDR is unlikely to make a material difference to the selling or otherwise of UCIS investments to unsuitable clients or even to suitable clients, but in an unsuitable manner. Normal competence and professionalism, along with following standard FSA regulations should already have accomplished satisfactory modes of business conduct.
    There is nothing intrinsically wrong with UCIS investments. They will generally be higher risk and that should ensure a professional level of due diligence. Whilst a number will fail – that is the very nature of the beast – many will succeed and provide returns greater than could be anticipated from standards investments. The trick is to ensure failures do not cause a clients finances to implode, and that they understand that loss is a real possibility.
    The process of assessment is not particularly difficult, though it may be a little time consuming.
    The problem with RDR is that it is massively time consuming and extremely costly. This leads one to the conclusion that the promotion of UCIS investments will either decline or continue “under the counter”, neither of which should be welcome outcomes.
    What is required to improved the current situation is firstly professionalism and secondly a better understanding of how to assess the risk aspects of these investments. The FSA would do everyone a great favour it they transferred expenditure from the destructive to the constructive. The weakness in that statement is that I do not believe that they have anyone on board that understands the concept of constructive, or even the concept of risk assessment and management. Saying the word does not make one an expert.

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