InvestmentsFeb 13 2023

FCA places restrictions on IFA over misappropriation of client funds

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FCA places restrictions on IFA over misappropriation of client funds
ByJane Matthews

The Financial Conduct Authority has placed a number of restrictions on an independent advice firm over concerns its sole director may have misappropriated £1.5mn of a client’s funds.

Campbell & Associates, based in West Wellow, Romsey, had the restrictions imposed on it last week (February 9), and is now prevented from carrying out any regulated activity and cannot reduce the value of its assets without the FCA’s consent.

Lisa Maureen Campbell is listed as the sole active director of the firm and is holder of senior management functions.

The regulator said it has “very serious concerns about the conduct of the firm” and is concerned the director may have managed a client’s funds without the required permission and may have failed to repay the clients funds as promised.

The firm was incorporated and authorised as Campbell & Raffle Independent Financial Advice Ltd in 2013 and changed its name to Campbell & Associates Independent Financial Advice Ltd in November 2020.

It has permission to provide advice and arrange deals in investments and pensions but does not have permission to hold client funds. 

Despite this, in July 2022, £1.5mn was transferred to the firm by a consumer having accepted its advice to invest in bonds due to mature in January 2023. 

The consumer was told that the funds were to be invested in bonds issued by a bank and was provided with a number of documents showing this.

However, the bank has since confirmed that it does not offer such bonds and has no record of any investment relating to the consumer in question.

An investigation by the FCA showed that instead between July 2022 and January 2023, the consumer’s funds were transferred to the personal accounts of the firm’s director or otherwise used to purchase a property for the firm’s director to live in.

The consumer repeatedly contacted the firm to arrange for their investment to be repaid as planned but the firm instead advised that the investment be rolled over and then claimed that the repayments had been made. 

The director then claimed that the repayments had been made and were being erroneously held up by the firm’s bank. She then claimed that the investment had been accidentally rolled over and could not be repaid.

The FCA investigation found that in reality, the director had misappropriated the majority of the funds and there were insufficient funds in the firm’s bank account to make the repayment. 

The firm has since repaid a proportion of the funds but £1.15mn remains unpaid, along with accrued interest.