FCA bans two advisers over "lack of integrity"

Added 9th June 2016

A British financial adviser and his boss have been banned from working in the financial services industry for lying to clients about where they invested pension pots totalling nearly £24m ($34.9m, €30.7m).

FCA bans two advisers over "lack of integrity"

In a statement released on Thursday, the Financial Conduct Authority (FCA) said that Patrick Gray, the owner of financial services firm PCD Wealth and Pensions Management (PCD) and his employee Mark Kelly, a financial adviser, showed a “lack of integrity” when advising more than 350 clients on their pensions.

Between 2008 and 2010, the regulator found PCD guilty of arranging for nearly £24m to be invested in risky investments without their knowledge or consent.

The watchdog said the pair cannot be fined as they were not “approved persons” at the time of the misconduct.

No qualifications

It found Gray guilty of giving investment advice to at least five clients despite having no qualifications or training as an adviser.  In one case he gave unsuitable advice to a client to invest in an unregulated collective investment scheme (Ucis).

It condemned the fraudsters for “recklessly” providing customers with misleading information on fees and charges.

The regulator found that Gray, who misled the FCA during a compelled interview, manipulated customers by getting them to sign incomplete investment forms to which he could later add fees, taken from their funds without their knowledge.

He also gave clients pension reports containing false and misleading assurances that they would receive advice on their investments even though, from October 2009, Gray knew that funds were being invested without their consent or knowledge.

The regulator said that PCD’s business strategy was designed to prevent customers from discovering where their funds had been invested and without any regard to the suitability of the investments for the customers.

Failure to disclose commission

The firm was also found guilty of failing to disclose to clients, the fees it received from product providers for recommending certain investments.

Often the fees were taken directly from the client’s investments without their knowledge, said the regulator, and in some cases Kelly arranged for this to paid directly into a bank account in his name.

“These two individuals misused pension funds, endangering the retirement incomes of hundreds of people. While further investigations continue, the FCA considers it necessary to prohibit them to help protect consumers,” said Mark Steward, director of enforcement and market oversight at the FCA.

The FCA confirmed there is an ongoing investigation into the firm’s practices.

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About Author

Monira Matin

Senior Reporter

Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.



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