FCA blocks adviser authorisation over past advice concerns

FCA blocks adviser authorisation over past advice concerns

The Financial Conduct Authority (FCA) has refused to authorise an adviser with at least £838,953 in compensation claims against her former company, saying it had concerns about her “competence and capability”.

In a final notice published on its website today (February 21), the regulator refused to authorise Elizabeth Walker to give advice at Wesleyan due to past advice failures relating to Sipp pension transfers which had led to an FCA intervention in her previous business.

The regulator found there were “serious concerns” as to Ms Walker’s “competence and capability” to be able to provide advice.

Ms Walker was the sole shareholder, director and adviser at C3 Financial Services where she gave advice to clients to transfer their pensions into a self-invested personal pension (Sipp) where the underlying investments were held in unregulated bonds. 

The FCA stated that Ms Walker had failed to ensure adequate systems and controls were in place at C3 to “mitigate the risk of poor outcomes to customers”.

In July 2017, the FCA demanded that C3 should cease all regulated activities relating to pensions and investment business until various remedial steps were implemented. 

Ms Walker then took the decision to close C3. Its authorisation was revoked by the FCA in September 2017 and the firm was dissolved in February 2018.

Since then, the Financial Services Compensation Scheme has received a number of claims against C3 relating to the investment and pensions advice given by Ms Walker. 

As at July 9, 2019, 63 claims had been determined by the FSCS, resulting in payments of £838,953 to 52 customers (with 62 further claims yet to be determined). 

The FCA said Ms Walker has acknowledged the seriousness of these matters, her responsibility for them, and that she had lacked the competence and capability at C3. 

Whilst the FCA acknowledged Ms Walker had made an effort to develop her skills in the form of training and exams, it still did not consider that she had proven she was a fit and proper person to continue in an advice role in which Wesleyan applied to appoint her. 

According to the regulator Wesleyan was aware of Ms Walker's history and, when she began working at the advice firm in May 2018, placed her on an extended observation period.

During this period Ms Walker was not able to see clients on her own until two other members of staff had signed off on her advice and was to be allocated a "buddy" with whom she was to discuss her recommendations. 

However, in December 2018 Wesleyan terminated Ms Walker's employment and withdrew its support of the application for authorisation.

The company said it had taken the decision in light of the volume of complaints with the FSCS against her previous company and the related "significant" advice issues. 

As Ms Walker did not consent to the withdrawal of the application the FCA was able to deliver its final determination.

According to the notice, Ms Walker said she “finds it difficult to believe some of the mistakes she made” and realises that her opinion of unregulated investments was wrong, and she should not have advised on them.