According to a final notice published today (May 26) the claims management company received temporary permissions on April 1, 2019 and applied for full permission to carry out regulated activities.
The firm was to focus on compensation claims concerning mis-sold self-invested personal pension, pension buyout bonds, and unsuitable pension transfer advice.
However, the regulator has denied the permissions for a number of reasons, including factors that indicate “UCM’s sole director Susan Ann Popplewell is not competent to manage the firm in compliance with all regulatory requirements”.
It said “an unsuitable individual”, named Keith Popplewell, “exercises a significant influence over and/or has a significant role at the firm”.
Mr Popplewell was previously the managing director of The Pensions Office Limited, which went into liquidation in 2015 as a result of receiving claims against unsuitable pension transfer advice.
It was an authorised financial advice firm, in which the Popplewell couple each held a 50 per cent shareholding at the relevant times.
On 13 June 2013, the FCA wrote a letter to TPO outlining its concerns regarding its failure to meet its regulatory responsibilities. TPO agreed to seek a voluntary variation of its permissions and went into liquidation in 2015.
The regulator’s concerns identified in the 2013 letter related to TPO’s systems and controls, including a lack of sufficient oversight and training for non-regulated staff, a templated approach to portfolio recommendations, and a failure adequately to assess clients’ attitudes to risk.
Soon after the FCA’s letter, UCM was incorporated with Ms Popplewell as its sole director and shareholder. UCM was regulated by the claims management regulator from December 29, 2013 onwards.
UCM then acquired a portion of TPO’s client database from TPO’s liquidator.
The claims management firm submitted 166 compensation claims to FSCS on behalf of clients who believed that they had previously suffered loss as a result of TPO’s conduct.
According to the FSCS, these claims submitted by UCM to the FSCS had, as at 25 April 2019, resulted in compensation payments by FSCS to 137 UCM clients of between £1,178.16 and £50,000, and totalling £5.6m.
The City watchdog said today it was concerned that Mr Popplewell may have a significant role and influence over UCM.
In the notice, it said Mr Popplewell had significantly greater business and financial services experience than Ms Popplewell but UCM’s solicitors said that the description of Mr Popplewell’s significant responsibilities at UCM in UCM’s business plan was incorrect and that his role was limited to “technical assistance” and “training”.
However, the FCA said it received “contradictory information. It said: “But during an interview with the authority Ms Popplewell stated that Mr Popplewell also does customer-facing work: 'he will phone clients and speak to them, because they know him obviously and they’ll speak to him'.
“In addition, Ms Popplewell indicated that UCM relies heavily on Mr Popplewell in relation to technical matters: he is 'in control of the complicated bits'."
The regulator said other reasons to not have permissions approved included the fact that UCM disregarded warnings from the CMR concerning UCM’s retention and use of data relating to TPO’s clients, and ignored instructions from the CMR to delete it.
“Overall, the authority cannot be satisfied that UCM is a fit and proper person or that it has appropriate human resources in place,” it said.
“For the reasons set out in this notice, the authority cannot ensure that UCM will satisfy, and continue to satisfy, the threshold conditions set out in Schedule 6 of the Act."
The FCA said the firm had 28 days from the date the decision notice was given to refer the matter to the Upper Tribunal but no referral was made within this period.
This latest notice comes as earlier this month, the FCA has announced proposals to ban CMCs from managing Financial Services Compensation Scheme claims where they have a relevant connection to the claim.
In January, a small group of CMCs collected almost £12m in fees on pension claims over the duration of one year, according to data collected by the FCA.
sonia.rach@ft.com
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