Adviser’s fury over FCA’s refusal to pay redress

Adviser’s fury over FCA’s refusal to pay redress

Accusations of acting as if it is above the law have been levelled at the Financial Conduct Authority for refusing to pay £6,000 in compensation to an adviser it wrongly listed as suspended on its register.

A compliance manager has lambasted the regulator after it refused a recommendation from the Complaints Commissioner to pay his client, a former Sesame adviser, £6,000 in compensation for the mistake.

In a public notice published last week, the FCA admitted it had wrongly given the impression that an adviser, who does not want to be named, was still suspended.

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The FCA’s register displayed a former trading name of the adviser’s firm, which was suspended, without making it clear the suspension related to a firm her current business was no longer associated with.

The adviser had approached Tony Catt of TC Compliance Services to discuss how she could get re-authorised, and he asked the FCA to remove the error on its register back in November, but to no avail.

Speaking to FTAdviser, Mr Catt said it wasn’t until he took the matter to the Commissioner in March that the FCA listened to his complaint and removed the incorrect information a month later.

Mr Catt, who is also an independent financial adviser, said the long delay in fixing the problem was damaging to the adviser’s business because any potential or existing client would “run a mile” if they thought she was suspended.

“The FCA thinks it is above the law,” he said, adding the regulator’s decision to refuse the compensation is “divorced from the real world”.

The compliance consultant said the error on the register was a “timebomb” which was in danger of ruining her reputation if anyone saw the ‘suspended’ entry on the FCA register.

In an email sent to the FCA’s complaints division, seen by FTAdviser, Mr Catt said: “The reputation of an adviser is an asset of huge value, and if it is damaged, its value is very much diminished.”

The FCA had opted to give the adviser £500 in redress, which Mr Catt said was not acceptable and demanded the regulator reconsider the amount.

“I find it incredible that the FCA is able to pick and choose its penalties; that is certainly not a luxury that any registered individual or firm would have if they fell foul of FCA guidelines.

“Surely it cannot simply disregard the recommendation of the Commissioner? Otherwise, this brings the status of the Commission into disrepute.”

The adviser had previously been suspended between May 2014 and November last year for an internal issue at Sesame after she had failed to use their client relationship management (CRM) system, an issue which she claims to have promptly rectified.

Mr Catt said she did not want to risk trying to resurrect her business while it looked like she was still suspended.

He also pointed out she missed out on business opportunities in the run-up to the end of the tax year, a period which makes up a large part of the annual business for many advisers.