Regulation  

Judge slams FCA for ‘disappointing and troubling’ notice

Judge slams FCA for ‘disappointing and troubling’ notice

An Upper Tribunal judge has labelled the Financial Conduct Authority’s publication of a decision notice relating to a fined and banned financial adviser “deeply disappointing and troubling”.

The tribunal has told the FCA it needs to rethink the way it goes about publishing decision notices following a complaint made by Clive Rosier, the former sole approved person and director of Bayliss & Co (Financial Services) Limited.

In a decision notice the FCA stated Mr Rosier “lacked skill, care and diligence and did not communicate properly with his clients”.

Article continues after advert

This was in relation to his failure to collect and record information about clients who were advised to invest in high risk products such as unregulated collective investment schemes.

He was fined £10,000 and had his approval to perform significant influence functions withdrawn. All this information was released to the press at the beginning of November 2013, and was reported on by publications including FTAdviser.

The press release quoted then head of FCA retail enforcement Bill Sillett, as saying: “When people go for financial advice the minimum they should be able to expect from the adviser is that they are competent.

“Unable to demonstrate that the advice he gave was suitable for this clients, Rosier failed to live up to this standard.”

The final notice stated Mr Rosier had referred the matter to the Upper Tribunal and that his previous application to the tribunal for an order preventing the FCA from publishing the decision notice was unsuccessful.

Following that ruling, Mr Rosier complained again to the tribunal. The original findings were unaffected and the new complaint was in relation to the manner in which information was released to the media.

In the new decision Judge Timothy Herrington stated that the FCA’s publication of a decision notice publicising ongoing proceedings fell well below the standard it would find acceptable.

“Similarly, the initial attitude the authority demonstrated in response to Mr Rosier’s complaint fell well below what it would expect from firms it regulates when handling customer complaints.”

The judge called on the regulator to strengthen its procedures relating to publicity for decision notices, specifically the press office’s apparent lack of awareness of the need to deal with decision notices differently to final notices.

The failure to obtain Mr Sillett’s approval of the final version of the press release, including a quote attributable to him; and the failure to escalate Mr Rosier’s complaint to Mr Sillett, was also criticised by the tribunal.

Mr Sillett also admitted that it was not unusual for the press office to “get the wrong end of the stick” and that had happened in this case.

Several of these issues hark back to the findings of the Davis review into the FCA’s handling of a life insurance review press pre-briefing, which identified failings in the oversight of the regulator’s press office, a lack of communication between departments and quotes not being signed off by those to whom they were attributed.