RegulationMay 25 2021

FCA cancels IFA's permissions after non-payment of Fos awards

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FCA cancels IFA's permissions after non-payment of Fos awards
BySonia Rach

The Financial Conduct Authority has cancelled the permissions of Ron Treherne IFA Limited for failing to meet threshold conditions and make compensation payments. 

The IFA has had its Part 4A permissions revoked after the regulator found that the firm did not pay out awards on complaints at the request of the Financial Ombudsman Service.

In a final notice issued on May 20 and published today (May 25), the FCA said that Ron Treherne was requested to pay compensation to a consumer for providing unsuitable advice to transfer his existing pension into a Sipp and mainly invest in one firm.

The consumer claimed that the IFA had not adequately assessed the suitability of the investment, and that he should not have been advised to transfer his pension into a Sipp.

The Fos instructed Ron Treherne to calculate fair compensation by comparing the value of the consumer’s pension, prior to the Sipp transfer, with the current value of his Sipp. 

On April 10, 2018, the consumer accepted the first Fos award, at which stage the Fos decision became binding on him and the IFA. However, Ron Treherne failed to comply with the first Fos award, despite repeated requests by the Fos and the FCA.

Likewise, another consumer complaint to the Fos related to similar unsuitable advice for which Ron Treherne was instructed to pay the consumer a lump sum of £132,124.47, but the IFA failed to comply with the award. 

The FCA outlined another reason for the permissions being cancelled which was that the IFA had failed to provide evidence that professional indemnity insurance had been obtained. 

The regulator had given the firm “ample opportunity to provide evidence that it holds valid PII cover, but has not received any such evidence,” it said.

According to the notice, the firm informed the regulator by email on February 8, 2019 that Ronald Treherne had been retired for five months and no longer practiced as an IFA, and was intending to apply for cancellation of his Part 4A permission. However, to date no such application to cancel authorisation has been received by the FCA. 

The FCA said: “The authority has concluded, on the basis of the facts and matters described above, that Treherne is failing to satisfy the suitability threshold condition, in that the authority is satisfied that Treherne is not a fit and proper person having regard to all the circumstances.

"In the opinion of the authority, Treherne has failed to satisfy the authority that it is conducting its affairs in an appropriate manner, having regard in particular to the interests of consumers.