The Financial Conduct Authority (FCA) has been making huge strides in cleaning up business practice in the UK recently. Almost all firms and individuals who provide financial advice or services in the UK need authorisation from the FCA in order to operate. This regulation helps to keep rogue traders, incompetent and unethical people offering unqualified advice, out of the financial market.
In late May 2015, Clive Rosier, an Independent Financial Advisor (IFA) and director of Birmingham-based debt advice firm, Bayliss & Co, lost an appeal to overturn a ban and fine imposed by the FCA in November 2013. The fine of £10,000 was given for offering financial advice on unregulated collective investment schemes. To quote the FCA, Bayliss & Co “lacked skill, care and diligence and did not communicate properly with his clients.” On top of this, they failed to collect the proper information on his clients, keep proper records of their dealings, and continually recommended high risk products which were not suitable for the people they were selling to.
While the FCA were criticised over their handling of the case, having announced that they were banning Rosier before the final decision was set in stone, the FCA maintains that Rosier should never have been operating in the first place. Despite jumping the gun on the decision, the former head of the FCA’s Retail Enforcement area, Bill Sillett, said in a statement: “When people go for financial advice the minimum they should be able to expect from the adviser is that they are competent.” That being said, the judge presiding over the Tribunal recommended that the FCA should strengthen their procedures when it comes to publicity and enforcement of their bans and fines.
Director of Trust Deed Scotland®, Mark Sommerville, welcomes the decision not to overturn the ban and fines. During the Tribunal Mr Rosier was found to have failed to comply with basic FCA regulations. While he was given the opportunity to explain how he would operate differently should the FCA lift his ban, he could offer no explanation of how he would operate within the law. Mark Sommerville commented on the state of affairs, saying: “We entirely welcome the FCA stepping in to clean up the debt advice market. These penalties can apply to everyone who offers incompetent debt advice, and will force unscrupulous firms to offer better advice. The quality of debt advice given in the UK varies wildly from firm to firm, and a lot of the advisors in the UK simply aren’t qualified to be giving the advice which they are offering. This is why the market needs regulating. If you’re seeking debt advice you really need to make sure that you’re talking to an FCA regulated advisor. If you want debt advice you can trust, it’s imperative that you make sure that your debt advisor is FCA approved.”