Kevin Wells was banned from any significant influence function but spared a £58,500 fine because of his financial situation, in what the FCA described as a “how-not-to’ guide to running a self invested personal pension.
Tracey McDermott, director of the enforcement and financial crime division at the FCA, said: “I would recommend that anybody operating, or thinking of operating, a Sipp reads the final notice in detail; it covers almost all aspects of Sipp operation and is a good indicator of the standards we expect.”
According to the FCA’s final notice, Mr Wells, who became managing director of MPAS in 2009, grew the business by moving from exclusively allowing “vanilla investments” to “A large proportion of more complex, esoteric and unregulated investments into its schemes, such as life settlement funds, overseas property, hotel rooms and unlisted shares.
By March 2011, approximately 40 per cent of the investments in the Montpelier Sipp were non-standard, 33 per cent of which were hotel room investments, according to the final notice.
The FCA said Mr Wells put client money at risk by breaching FCA rules on client assets, failed to vet and monitor third parties, for example the IFAs and fund managers with which MPAS dealt; and lacked adequate knowledge of the assets it administered for clients.
Last year, Graeme Sampson, former finance director of MPAS was fined £17,850 by the financial regulator, citing a “failure to understand or ensure Montpelier was meeting its regulatory capital requirements”.
Background
As part of a Sipp thematic review in October 2010, a supervisory visit to MPAS identified numerous regulatory failings, which it formally communicated to MPAS on 21 January 2011. According to the final notice, between January and May 2011, MPAS arranged an audit review, but in May 2011 its book was sold to Curtis Banks in May 2011.
A statement in Montpelier Pension Administration Service’s 2010 annual report referred to unnamed issues surrounding the sale of the business, eventually acquired by Curtis Banks in May 2011, because of the “nature and complexity of some of the investments.”
Sipp review
Last year the former regulator began consulting on increasing capital requirements for Sipp operators based on assets held.
