View more on these topics

Openwork adviser axed in Ucis row may launch legal action

An adviser is considering taking legal action against Openwork for breach of contract after he and another adviser were dismissed from the network for promoting Ucis funds.

Tied adviser Ian Milne invested client money in the Olive Tree Kalamon fund between 2008 and 2011. Last December, the FSA informed Openwork that the two advisers were promoting the Ucis fund without the required authority.

Milne had four Openwork clients invested in the Ucis fund with a total investment of around £160,000. Another adviser, Philip Orr, had one Openwork client with an investment of around £16,000.

In February, Openwork suspended them for breaching the Financial Services and Markets Act and the advisers were deemed to be not fit and proper to represent Openwork.

The advisers claim Openwork knew they were investing in the products for three years and say it was the network’s responsibility to tell them of any wrongdoing.
But Openwork says it told the advisers that any clients wanting to invest in the Ucis could only do so within a Sipp.

Olive Tree told the advisers the funds were to be used on an execution-only basis and not through Openwork.

Milne says: “I just cannot believe how poorly we have been treated by the network. I accept that I did something wrong but it was through ignorance and we have been treated dreadfully.”

An Openwork spokesman says: “Until December 2010, Openwork was not aware that the advisers were promoting a Ucis. Openwork has never marketed a Ucis proposition nor have we ever given implied or explicit approval for a person holding a contract with Openwork to promote or in any way give advice on a Ucis.

“We are satisfied with the grounds for termination and we are yet to receive any formal notice of legal proceedings.”

The FSA declined to comment.

Recommended

7

Partnership warns Treasury of capped drawdown risk

Partnership has warned the Treasury there is a significant risk that large numbers of people in capped drawdown will exhaust their pension funds prematurely. Under the capped drawdown regime, which came into force in April, the need to annuitise at 75 or move into alternatively secured pension was scrapped while the maximum amount of pension […]

12

Half of bank clients have no knowledge of charge levels

A damning new study reveals half of customers advised by banks and building societies on financial products have no idea what charges they are paying. The extensive research of over 16,000 people, carried out by the British Population Survey on behalf of Alan Steel Asset Management, shows 50 per cent of customers who bought products […]

SimplyBiz buys Sifa

SimplyBiz has bought Sifa, the trade body and support provider for solicitor IFAs. It has invested £200,000 into Sifa, separate from the purchase, and it is prepared to make further investment. Sifa’s 170 member firms, which include over 1,000 advisers, will be brought under the SimplyBiz brand. SimplyBiz provides compliance and support services to over […]

7

UK inflation rises to 4.4%

The UK consumer prices index has risen to 4.4 per cent in July, according to the Office for National Statistics. The consumer prices index is up 0.2 per cent from 4.2 per cent in June, however the retail prices index remains unchanged at 5 per cent. The Bank of England said last week that it […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

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

  1. “Ignorance”

    Quite!

  2. One of the reasons why advisers become Appointed Representatives rather than Directly Authorised is because the Network gives clear guidelines as to what they can and can’t do. This then frees up more time to spend on generating business.

    It was only a few weeks ago that the FSA announced a personal fine for the former MD of failed Network Alpha to Omega because one of his ARs was selling UCIS products. The FSA stated that the Network should have been aware.

    Should Openwork have been aware? Will this be the end of the story?

  3. “The advisers claim Openwork knew they were investing in the products for three years and say it was the network’s responsibility to tell them of any wrongdoing.”

    The advisers must have known. Blaming others for their shoddy practices is plain wrong.

  4. Networks are one of the riskiest business models on the FSA radar. This is a prime example of the ‘reasons why’.

  5. Every time I speak to an AR I ask “what does your contract say?”

    Then I ask if their sponsoring firm could prove them negligent in a court of law.

    They invariably don’t have a clue, they signed the AR contract without taking legal advice and then threaten to take legal action when the network makes a commercial decision to terminate their agency? Come on guys.

    What also suprises me is the FSA’s confusion over who is responsible for what in this internationally unique regulatory arrangement, how did the regulator get into this state?

  6. It’s no surprise that Openwork have used these advisers as scapegoats. The Openwork senior management, including the Chairman, were aware that these products were being sold by some of their advisers. It keeps the FSA off their back and they don’t lose too much production.
    The FSA have handled UCIS products badly. They’re coming down on firms like a ton of bricks however they have to take some responsibility themselves. Their inability to communicate in simply terms makes life very difficult for advisers. Referring to the handbook is a joke.

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