The Financial Conduct Authority has barred a claims management company from dealing with the clients of an advice company over conflict of interest concerns.
An update on the FCA’s register says Money Redress Limited, which obtained a temporary permission to trade as a CMC in April, is prohibited from bringing claims on behalf of clients of advice company Pension Calculator Limited, which has now ceased trading.
The FCA’s note says the company must “not on-board any further clients that were advised by Pension Calculator Limited” and must “not commence or progress any claims for redress on behalf of any clients that were advised by PCL”.
Money Redress had worked with Pension Calculator clients who are understood to have lost money on high-risk assets, although the Financial Ombudsman Service has yet to receive a complaint about these investments.
Companies House data shows the companies are connected through a director they share.
Philip Milton, managing director of advice company PJ Milton and Co, wrote to the regulator earlier this year to voice his concerns after taking on investment responsibilities for former clients of a failed discretionary fund manager.
His company had taken over investments previously run by Organic Investment Management Limited, which worked with Pension Calculator and which the FCA banned from conducting any regulated activity in December 2018.
The Financial Services Compensation Scheme said on September 6 it had begun accepting claims against Organic.
Mr Milton said that many of the clients had been placed in “totally inappropriate” investments.
A former client of Pension Calculator, who is now a client of Mr Milton’s, was approached by Money Redress about making claims in relation to their holdings.
But the FCA has ordered Money Redress to write to existing clients to inform them of the restriction and refund any fees already paid.
In a letter to a client dated July 26, seen by Financial Adviser, Money Redress wrote: “You were introduced to us by Pension Calculator Limited, who originally recommended the [self-invested personal pension] to you and use of Organic as your [DFM] to manage the investments in your Sipp.
“There is a connection between us and PCL, because the managing director of Money Redress Limited, Mr Rob Ridge, was and is a director of PCL. This connection creates a conflict of interest, and for that reason we can no longer progress your claim for compensation on your behalf.”
Mr Ridge told Financial Adviser: “All relevant clients have been advised of [the restriction] in writing and have had their agreements cancelled. Money Redress Limited has received no complaints and at no point were any fees charged to the clients.”
The FCA did not comment.