FCA hones in on Harlequin-embattled adviser firm

A change to the financial services registered entry for Sussex Independent Financial Advisers has suggested the FCA is keeping a close eye on complaints activity relating to the firm.

According to the register, the firm is required to notify the regulator of any complaint it receives relating to regulated business within 48 hours of receiving the complaint.

The FCA also requires it to ensure it has the funds likely to be sufficient to satisfy any compensation should a complaint be upheld. The register said those funds should be held in a separate bank account and should not be used by the firm for anything else until the complaint has been determined and any resulting compensation has been paid in full.

In addition, the register also said Sussex must provide the FCA with all correspondence sent to any complainant.

The firm has faced a number of complaints at the Financial Ombudsman Service (FOS) for the role it played in advising customers on investing in Harlequin, the unregulated overseas property investment scheme that took around £400m of investors' money to develop villas in the Caribbean. The scheme ultimately ran into trouble and the villas were never built.

The FOS website shows six complaints have been upheld against the firm, five of which related to Harlequin. 

On 8 July 2019, the FCA revoked all of the firm's regulatory permissions. The Upper Tribunal then rejected Sussex IFA's plea to overturn the FCA's decision.

PA understands that the firm has since regained its regulatory permissions on the condition it follows the requirements strictly set out on its register entry.

Sussex IFA SIFA operations and compliance director Karl Hopper-Young said the firm was involved with Harlequin because two financial advisers asked the firm to set up a number of self-invested personal pensions for their clients. Hopper-Young said Sussex IFA did not get involved with advising the clients, nor did it take any commission from the Harlequin investment.

"I've been in financial services for 32 years without complaint, and we suddenly had these four complaints that were upheld because we sold the wrapper - we've never met the clients."

To avoid the business closing and falling on the Financial Services Compensation Scheme, Hopper-Young said he and his business partner put nearly £500,000 into the business to keep it afloat and out of the Financial Services Compensation Scheme.

The FCA has been contacted for comment. 

• Tweet  
• Facebook  
• LinkedIn  
• Send to  

• Topics
• Your profession
• Sussex Independent Financial Advisers
• FCA
• FS Register