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Unauthorised Wealth Managers Banned for Lack of Integrity
22nd June 2016
Unauthorised Wealth Managers banned for lack of integrity
The FCA recently banned two wealth managers from working within the financial services industry ever again due to their lack of integrity.
The City watchdog announced the lifetime ban for two individuals - Mark Kelly and Patrick Gray - in a final notice and press release this month.
Patrick Gray was an adviser for PCD Wealth and Pensions Management a pseudonym that Mark Kelly operated under as an individual to provide financial services to UK customers.
Over the course of 2008 to 2010, the regulator informs that nearly £24 million was invested by over 350 customers in risky and potentially unsuitable investments without the knowledge of consent of customers.
Advice was given to customers by Mr Gray in the knowledge that he had no qualifications or training to do so as well as providing customers with false pension reports containing misleading assurances.
In addition, they failed to tell customers that they were receiving commission and fees for these investments. These fee and commission payments were then taken directly out of customers’ investments without their knowledge and, over the period, amounted to £3.1 million.
The regulator informs the corrupt pair’s “process was designed to prevent customers from discovering where their funds had been invested and without regard to the sustainability of the investments for the customers.”
These two individuals misused pension funds and as a result of their wrongdoings, many customers lost thousands of pounds from their savings with the FCA’s Director of enforcement and market oversight, Mark Steward saying they “endanger[ed] the retirement incomes of hundreds of people.”
It is interesting to note however, that neither of these individuals were authorised and regulated as ‘Approved Persons’ by the FCA at that time of the misconduct. As a result, the FCA has thus far been unable to fine them. However, it should be noted that further investigations continue and in the meantime, the FCA “considers it necessary to prohibit them to help protect consumers.”
This sorry tale again highlights the importance to all industry participants – both consumers and financial service providers alike – of the need to know who you are dealing with.
Due diligence really is all important. Having greater knowledge and understanding of who you are dealing with can only help towards ensuring a higher level of protection of your interests, whatever they may be.
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The banned individuals:
“demonstrated a lack of honesty and integrity such that [they] fail to meet the minimum regulatory standards of the Authority”
FCA, Final Notices, June 2016
“Mr Kelly’s failings and actions were designed to enable him to profit at the expense of consumers. They were calculated, prolonged and dishonest and he would have been aware of the clear risk that consumers would suffer a loss that their age would prevent them from recovering.”
FCA, Final Notices, June 2016