The Financial Services Authority (FSA) of UK has fined Moneywise IFA £19,600 for failing to have sufficiently robust compliance arrangements for the investment advice it gave customers using platforms and discretionary portfolios.
FSA in its investigation found that Moneywise did not ensure its compliance arrangements evolved as the business grew. As such, the firm did not have robust arrangements for training advisers and ensuring suitability reports were clear, fair and not misleading.
Moneywise also recommended platform-based investment to 519 customers but failed to ensure its advisers explained their rationale clearly to investors. Furthermore, the firm didn’t ensure its advisers understood the reasons for making such a recommendation, said FSA.
The FSA also found that Moneywise had not made it clear to customers that some of the underlying investments contained Unregulated Collective Investment Schemes (UCIS) and the associated risks that needed to be understood prior to investment.
Despite these failings, the FSA did not find any evidence that customers had suffered any financial detriment. Furthermore, Moneywise appointed an external compliance consultant, made changes recommended by the consultant, and appointed a new compliance officer at board level.