The FSA has fined Money Wise IFA £19,600 for compliance failings on investment advice it gave to more than 500 customers using platforms and discretionary portfolios.
According to the regulator, the Bath-based business did not have sufficiently-robust compliance arrangements, particularly for the training of advisers and ensuring suitability reports were clear, fair and not misleading.
Despite recommending platform-based investments to 519 customers, the firm failed to ensure advisers explained their rationale clearly to investors. As a result, clients were not fully aware of the reasons behind their recommendations.
Additionally, the FSA found Money Wise had not made it clear to customers some of the underlying investments contained unregulated collective investment schemes (UCIS) and the associated risks that needed to be understood prior to investment.
Despite these failings, the FSA did not find any evidence customers had suffered any financial detriment.
Furthermore, Money Wise appointed an external compliance consultant, made changes recommended by the consultant, and appointed a new compliance officer at board level.
Because of these improvements, and Money Wise's agreement to settle at an early stage of the investigation, the firm qualified for a 30% discount. Without the reduction, the fine would have been £28,000.
"Firms that move to platform-based investment models need to ensure their advisers are properly trained and understand the nature of all of the underlying investments," says FSA director of enforcement and financial crime Margaret Cole.
"They must also make sure they are properly supported by adequate compliance arrangements."
Moneywise's five directors are based in offices in Bath but its advisers are also based in Bournemouth, Cambridge and London.
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