The FSA has publicly censured an IFA firm and an individual IFA for failing to demonstrate the suitability of their advice.
Birmingham IFA firm Wheatcroft Fox & Company has been censured for systems and controls failings, an inability to demonstrate the suitability of advice and for failing to co-operate with the regulator.
Partner Peter Fox has also been banned from carrying out any significant influence functions.
The failings at Wheatcroft Fox emerged during an FSA visit in November 2008. Following the visit, Wheatcroft Fox was referred to enforcement, after the FSA identified problems with the firm’s sales and advice processes.
The FSA found a failure to record sufficient information about customers’ personal and financial circumstances and a failure to ensure its systems and controls were adequate to monitor the suitability of its advice.
In a separate case, the FSA has publicly censured and banned West Midlands IFA Gary Hexley for giving customers unsuitable investment advice. Hexley’s ban relates to investments set up through his own property development company, Greenfield International, in 2003 and investment advice he gave at Exclusive Asset Management between January 2009 and May 2010. Both companies are now in liquidation.
Hexley’s misconduct came to light in April 2010 during an FSA visit to Exclusive, prompted by complaints from clients and other IFAs.
The FSA found that Hexley had told investors they would be shareholders in Greenfield in return for their investments, which was not the case.
Hexley failed to disclose accurately to investors when they would receive repayment of their investments.
He also failed to demonstrate the suitability of advice he gave at Exclusive, to explain the reasons for his recommendations and relied on a small range of investments which paid higher commission.
FSA head of retail enforcement Tom Spender said: “The FSA will take action against individuals who fail to dem-onstrate competence and capability.”