The FCA makes clear its expectations of financial advisers
The FCA has published a final notice cancelling the permission of Bayliss & Company (Financial Services) Limited, following refusal of the sole director's permission to appeal a 2015 decision of the Upper Tribunal. Separately, a husband and wife investment adviser team have also been banned, due to a lack of integrity. The FCA has been tenacious in its pursuit of both outcomes.
Financial adviser Clive Rosier has been fined £10,000 and prohibited from performing any significant influence functions, following refusal of permission to appeal against a 2015 decision of the Upper Tribunal. As a result, the permission of his firm, of which Mr Rosier was the sole approved person, has been cancelled.
The FCA published a decision notice against Mr Rosier in 2013, on the basis that he failed to act with due skill, care and diligence and failed to take reasonable steps to ensure that Bayliss complied with the requirements and standards of the regulatory system. This decision was referred by Mr Rosier to the Upper Tribunal.
Although ultimately successful, the FCA's handling of the case was criticised, as reported here previously. The judge in the case, Timothy Herrington, said that the FCA's publication of the decision notice was "deeply disappointing and troubling".
Despite this, Mr Rosier's permission to appeal was denied in March, and the FCA re-imposed the fine and ban on 5 October.
In the Upper Tribunal's original decision Judge Herrington said: "The tone and culture of the firm must be set from the top and we are not satisfied that Mr Rosier would set the right tone or that the culture of the firm would change."
On 12 October 2017, in an unconnected case, the husband and wife partners of Westwood Independent Financial Planners were banned from working in financial services for integrity failings. The couple had significant liabilities to consumers from successful FOS complaints, and the firm had gone into 'sequestration' in 2011.
A decision notice was issued in October 2016. Mr and Mrs Chiesa sought disclosure from the FCA at the Upper Tribunal, claiming that the regulator had acted in bad faith. This application was refused.
Mr and Mrs Chiesa had not disclosed all of their assets, preventing them being distributed to their creditors. The FCA said they: "misled their creditors, especially the FSCS, in a calculated way. Their misconduct demonstrates a serious lack of integrity."
These cases serve as a reminder to financial advisers not only of the importance of acting with integrity and due skill, care and diligence, but also that errors made by the FCA will not necessarily lead to a successful application for appeal. Although both of these cases are rather extreme, the FCA is making clear its expectations of financial advisers and its determination to see cases through.
This article was co-authored by Katie Fry-Paul, Trainee Solicitor in RPC's Regulatory team.