The Financial Conduct Authority (FCA) has issued a First Supervisory Notice to Cheltenham-based advisory firm Bank House Investment Management Limited, which amongst other things, orders the firm to cease conducting regulated activities.
The regulator has acted in this way for a number of reasons, not least that the firm has failed to comply with a Voluntary Requirement imposed after concerns were identified regarding its advice on Self Invested Personal Pensions (SIPPs).
The FCA first became concerned about Bank House in July 2015, when questions were raised over the firm’s advice to a number of clients to switch their pension savings into SIPPs with high-risk underlying investments. The FCA and the firm entered into a Voluntary Requirement in September 2015 which prevented Bank House from switching or transferring any pension plan to a SIPP until it had provided independent verification to the FCA that “a robust and compliant advisory process” was in place for this type of advice. It was also required to have all SIPP switches independently checked.
However, later in 2015 the FCA obtained information from a provider of SIPPs indicating that Bank House had advised 72 clients on 78 transactions involving SIPP switches during October 2015, in apparent breach of the Voluntary Requirement. These transactions involved switching total funds of some £2,650,000. Only 30 of these transactions were recorded in Bank House’s new business register, and none were shown as a SIPP in this register.
Bank House claimed that these transactions were not SIPP switches, merely switches to personal pensions which had deferred SIPP options. However, the provider subsequently told the FCA that they did not offer the deferred SIPP option. Bank House also claimed that the FCA had agreed they could switch clients to SIPPs offered by platforms, even though no mention of any such exemption was mentioned in the Voluntary Requirement.
The FCA is also concerned that Bank House failed to give it accurate information about its relationship with an unauthorised third party introducer – for example the FCA was not told that client data was being sold to this third party – and that Bank House has failed to pay regulatory fees totalling £22,859.29.
The FCA believes that Bank House is failing to comply with Principle 11;
“A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.”
or with Threshold Condition 2C;
“A firm must be capable of being effectively supervised by the FCA”
or Threshold Condition 2E:
“A firm must be a fit and proper person.”
As a result of these failings, the latest order against the firm now compels them to cease all regulated activities, but Bank House is also prevented from selling any of its assets or loan book, or making ‘significant or unusual payments’ to any employee or shareholder. It must also secure all its books and records and make these available to the FCA, and write to all its clients within 14 days informing them of the situation.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.