IFA deemed "not a fit and proper person" by FSA. Is it bad?

MrBean_2

I have seeked advice from an independent financial advisor concerning buying life insurance and a pension plan. I have now discovered that this person was deemed "not a fit and proper person" in a final notice of the Financial Service Authority, in relation to a previous business she was running. How serious is this? Should I avoid working with this person?

nrsql

Do you trust them?
I would check any advice they give - but you should do that anyway.

jonesMUFCforever

Be honest what do you think?

dunstonh

It couldnt have been that bad if the FSA allows them to continue. Was the previous business role an advice role? Was it the company that had issues or individuals within the company?

I would shy away personally if it is directly linked to him. Although they may have learned their lesson and could now be the model adviser. I would not employ any adviser that has had FSA action taken against them.

The only test will be in the recommendation and the research. Ask to see the research. The research should show the logic behind the recommendation and whilst you may not understand all the terms, you should be able to understand the logic.

MrBean_2

dunstonh wrote:

It couldnt have been that bad if the FSA allows them to continue. Was the previous business role an advice role? Was it the company that had issues or individuals within the company?

I would shy away personally if it is directly linked to him. Although they may have learned their lesson and could now be the model adviser. I would not employ any adviser that has had FSA action taken against them.

The only test will be in the recommendation and the research. Ask to see the research. The research should show the logic behind the recommendation and whilst you may not understand all the terms, you should be able to understand the logic.

Thanks to all who replied.
This adviser owned a firm, which was sold. Subsequently she was deemed not fit to act as director of a second firm, due to unresolved complaints with the first firm. As a result the second firm was denied permission to operate as an investment and insurance intermediary. This adviser now is employed in a firm outside the UK catering to UK expats.

The research seemed sound to me and the adviser knowledgeable, the only issue is if I can trust her, so I'm trying to get a sense of how serious this is. For example, could this adviser work as an IFA in the UK?

dunstonh

the only issue is if I can trust her

You must be able to trust your adviser. A good relationship is beneficial to both sides and you have to have confidence in the person you are dealing with.

This adviser now is employed in a firm outside the UK catering to UK expats.

Aha!!! In that case she is not authorised by the FSA. The FSA cover UK advisers not those outside of the UK. That would suggest that she has been struck off in the UK and this is the only route available to her.

For example, could this adviser work as an IFA in the UK?

Of course, she could have wanted the lifestyle change that is involved with catering to UK expats. However, it is probably more likely that losing her ability to advise in the UK meant she had to consider alternatives and the non-regulated ex pat market is a common option for those in that position.

I think you have to be whiter than white in the advice game. For the FSA to pull your control functions you have to be doing something very wrong. There is a whole load of things they would do before going that far. They would have been given time to sort the issue with action plans set in place to deal with it, been reprimanded and possibly fined. You only tend to get struck off though if it is gross misconduct or fraud.

I would walk away knowing what you know.

MrBean_2

dunstonh wrote:

I think you have to be whiter than white in the advice game. For the FSA to pull your control functions you have to be doing something very wrong. There is a whole load of things they would do before going that far. They would have been given time to sort the issue with action plans set in place to deal with it, been reprimanded and possibly fined. You only tend to get struck off though if it is gross misconduct or fraud.

I would walk away knowing what you know.

In addition to working for a firm abroad, she is still working in the UK as appointed representative of a firm authorized by the FSA, but she is not authorized herself. In both firms, she doesn't handle client's money directly, so it's unlikely she can't do much damage. But you are right I must be able to trust her. Perhaps I can bring up the issue and see what she say.

dunstonh

Also, in reference to the thread title. She isnt an IFA. If she has said anything to suggest that she is, then you can take that as evidence of a lack of honesty.

You can be struck off from holding a control function role but still work for a firm in a non regulated area....such as making the tea

caveat_emptor

"Oh what a tangled web we weave, when at first we practice to deceive" and 'bargepole' comes to mind. I have problem with IFAs anyway without one having a history.

MrBean_2

dunstonh wrote:

Also, in reference to the thread title. She isnt an IFA. If she has said anything to suggest that she is, then you can take that as evidence of a lack of honesty.

You can be struck off from holding a control function role but still work for a firm in a non regulated area....such as making the tea

dunstonh, forgive my ignorance, can you clarify for me why she's not an IFA? She presents herself as managing director of an asset management firm which is an appointed representative of another, FSA-authorized firm. I believe she seeked authorization for the firm she´s directing but it was denied.

benood

I'd be very wary indeed - trust is the most important commodity when it comes to IFA's.