The Financial Conduct Authority (FCA) has removed an IFA's permissions for not having any qualified retail investment advisers working for the firm, the first action of its kind the regulator has taken since the introduction of the Retail Distribution Review (RDR).
The FCA said in its Supervisory Notice out today that the variation in Catalyst Fund Management's permission was "necessary in order to advance the Authority's consumer protection objective".
FCA director of long-term savings and pensions Nick Poyntz-Wright said: "One of our objectives is to secure an appropriate degree of protection for consumers, which means that we will work to ensure that firms can only offer advice to consumers if they have qualified advisers."
The RDR has made it compulsory for advisers to have relevant minimum qualifications of QCF Level 4 in order to be allowed to carry out retail investment advice.
The FCA said firms which do not employ qualified retail investment advisers, while being permitted to provide investment advice to retail consumers, "present a risk to the authority's operational objective of consumer protection".
The FCA also said Catalyst was not "open and co-operative" in its dealings with the authority, and was in breach of Principle 11 (relations with regulators) of the Authority's Principles for Businesses, in "failing to respond adequately to communications from the authority requesting that it vary its permission to remove the retail (investment) customer type from its permitted regulated activity of advising on investments".
It said Catalyst, which was permitted to conduct the regulated activity of advising on investments, had failed to apply to vary its permission despite "repeated requests from the Authority" to do so.
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