Ascentric managing director Hugo Thorman has criticised the FSA fine of Moneywise IFA, saying the sanction was the regulator’s way of letting the platform market know it will come under greater scrutiny.
Moneywise was referred to the FSA’s enforcement and financial crime unit following a thematic review of the platform market in March. This month the FSA fined Moneywise £19,600 for compliance failings around the investment advice it gave to clients.
Despite the failings highlighted by the FSA, the regulator did not find any evidence that clients had suffered financial detriment.
Thorman says the FSA wanted to send a message to the industry that it is looking closely at the platform market following the review.
He says: “It is a new market and the regulator is worried and wants to make sure it is born in the right way but I feel the Moneywise fine was somewhat harsh.”
Thorman says as the financial services sector increasingly moves to adopting wraps, it is clear that firms operating in the platform area need to ensure they are compliant.
He adds: “It is unfortunate that Moneywise was censured the way it was. It is a good firm and there are instances of worse firms out there that have not been picked up.”
Capita Financial Software business development director William Watling says: “The regulator is beginning to take a much closer interest in how IFAs work with platforms. Given its work in this area and industry research showing there are low levels of adviser due diligence around platforms, it is a red rag to a bull.”