FSA compliance failing leads to fine

Advice organisation Moneywise IFA Limited has been fined for failing to have sufficiently robust Financial Services Authority (FSA) compliance arrangements in place.

The firm has been ordered to pay £19,600 after an investigation found that the rationale behind the investment advice it gave customers using platforms and discretionary portfolios was not explained clearly to investors.

In addition, the regulator found that the company had not made it clear to customers that some of the underlying investments contained unregulated collective investment schemes, with associated risks.

Margaret Cole, director of enforcement and financial crime at the watchdog, said that as Moneywise's business model evolved to include wrap platforms, its compliance function and elements of its staff training "did not keep pace".

"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. They must also make sure they are properly supported by adequate compliance arrangements," she advised.

It comes after the FSA banned two mortgage brokers after an investigation deemed that their "reckless business practices" allowed false and misleading mortgage applications to be made to lenders.

Posted by James Harrison