Chase de Vere Independent Financial Advisers limited

FCA action

fines

2

in fines

£1.68m

most recent

November 2014

• Fined £560,000 on 5 November 2014

  The Financial Conduct Authority (the FCA) issued a Final Notice against Chase de Vere Independent Financial Advisers Limited (CdV) of 60 New Broad Street London EC2M 1JJ on 5 November 2014 which imposed a financial penalty of £560,000 in respect of breaches of Principles 3 and 3 during the period between August 2005 and June 2009 arising from its sales of Keydata life settlement products. CdV breached Principle 3 by failing to put in place adequate systems and controls to ensure that the distinctive features of the Keydata life settlement products were researched to an adequate standard, to understand the risks they posed to investors and to ensure that these risks were properly understood by the firm's advisers. CdV also failed to put in place adequate risk management systems to mitigate the risk that its advisers would fail to describe the Keydata Products in a way that was clear, fair and not misleading. CdV breached Principle 7 by failing to disclose to its customers certain distinctive features and risks of the Keydata life settlement products in a way which was clear, fair and not misleading. CdV has agreed to review its sales to any customers who have not already made a claim to the firm or the Financial Services Compensation Scheme about Keydata, and to provide redress where appropriate.

• Fined £1.12m on 10 November 2008

  The FSA has imposed a penalty of £1.12 million on AWD in respect of breaches of principles 9 (Customers: relationships of trust) and 3 (Management and Control) of the FSA's Principles for Businesses (the Principles) during the period between 28 February 2006 and 31 October 2007. The breaches arise from the Firm's pension transfer, pension annuity and income withdrawal business and in respect of systemic weaknesses in its compliance systems and controls. AWD agreed to settle at an early stage of the FSA's investigation. It therefore qualified for a 30% (stage 1) reduction in penalty, pursuant to the FSA's executive settlement procedures. Were it not for this discount, the FSA would have imposed a financial penalty of £1.6 million on AWD. AWD breached principle 9 during the relevant period as it 1) provided unsuitable advice in respect of some pension transfers, pension annuities and income withdrawals; 2) failed to demonstrate the suitability of it's advice to some of its customers AWD breached principle 3 during the relevant period as it 1) failed to operate an adequate system for training sales advisers and sales managers and for monitoring their competence to give suitable advice; 2) failed to operate effective compliance checking and information gathering processes to identify instances of unsuitable advice 3) had inadequate controls and inappropriate incentives to ensure that the advisers gave suitable advice and processed their sales in an appropriate manner. The firm's failings are viewed as particularly serious because: (1) The Firm's systemic failings have occurred in the wake of the Pension Simplification legislation in April 2006 (A-day) and the FSA's regular public statements to the regulated IFA sector emphasising the importance of giving suitable advice in relation to pension transfers. (2) The Firm is a major IFA and made about 4,300 sales of pension transfers, pension annuities and income withdrawals to approximately 2,800 customers. The Firm has estimated that approximately 800 customers may have received unsuitable advice in relation to 1,200 sales. The overall value of the losses to customers has yet to be quantified precisely but the Firm accepts that it is likely to be substantial. (3) The failings continued after the Firm's weak compliance controls were brought to the attention of the Firm by both the FSA and the Firm's own compliance consultants.