Two financial advisers have been banned from working in financial services for placing clients’ funds in potentially unsuitable investments without these clients’ knowledge or consent. The pair also concealed from their clients the fees they were receiving.
The Financial Conduct Authority (FCA) took action against Mark Kelly and Patrick Gray after discovering a litany of different issues that cast doubt on their integrity. Mr Kelly traded as PCD Wealth and Pensions Management, based in Wilmslow, Cheshire, and Mr Gray was one of his employees.
The regulator was unable to impose any fines alongside the bans as neither Mr Kelly or Mr Gray held an approved person role at the time of the misconduct.
The issues concerning Mr Kelly included:
• Investing clients’ pension funds in high risk areas without their knowledge or consent
• Failing to ensure that the selected investments were suitable for the clients’ circumstances
• Taking steps to try and prevent clients discovering where their monies had been invested
• Receiving payments from product providers, taken out of the investments themselves, without clients’ knowledge or consent
• Certifying clients’ passports as true copies of the originals, and true likenesses of his clients, when in fact he had not met the clients and was not in a position to do so
In one case the FCA found that Mr Kelly had invested a client’s entire pension fund in an unregulated collective investment scheme (UCIS), before selling 50% of this investment just six months later and re-investing the monies in a structured product, all without the knowledge or consent of the client concerned. Many of the clients were nearing retirement, and the high risk and illiquid nature of UCIS made his recommendations particularly unsuitable.
In his Final Notice, the FCA is in no doubt that a prohibition is the appropriate sanction for Mr Kelly. The regulator says:
“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. Mr Kelly’s failings are very serious and a prohibition order is essential in order to protect consumers.”
The issues concerning Mr Gray included:
• Providing investment advice without appropriate qualifications or training
• Giving advice to invest in high risk UCIS that were not suitable for the clients
• Misleading clients as to the fees and charges payable
• Asking clients to sign incomplete application forms
• Misleading the FCA in a compelled interview. Here he made two misleading statements, firstly saying that he did not give advice to clients, and then stating that the application forms he asked clients to sign included information about fees payable to PCD
The failings affected more than 350 clients, who collectively invested almost £24 million.
Mark Steward, director of enforcement and market oversight at the FCA said:
“These two individuals misused pension funds, endangering the retirement incomes of hundreds of people. While further investigations continue, the FCA considers it necessary to prohibit them to help protect consumers.”
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.