City watchdog proposes ban and £234k fine for TailorMade Independent boss
The City watchdog has today proposed a ban and a fine of £233,600 for the chief executive of TailorMade Independent.
The Financial Conduct Authority (FCA) alleges that Alistair Burns failed to make sure TailorMade, which was dissolved in July this year, was providing clients with suitable advice.
Between January 2010 and January 2013, TailorMade advised over 1,600 customers to transfer or switch their existing pension funds into unregulated investments such as green oil, biofuels, farmland and overseas property.
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In total, customers ploughed over £100m into these investments, many of which were not typically permitted by their existing pension schemes, and the watchdog claims the process used to advise customers, which Burns partly responsible for, was not up to scratch.
In relation to the overseas property, a firm TailorMade used to make the investments subsequently went bust, and customers who had poured money into these assets lost their investment.
The regulator also claims Burns did not properly disclose his own and others in the business' conflicts of interest, alleging that he benefited financially by referring clients.
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The Financial Services Compensation Scheme has already upheld 919 claims of unsuitable advice against the firm and over £40m has been shelled out in compensation.
Burns has referred the FCA's decision to tribunal, which may decided to uphold, alter or scrap the regulator's plans.
However, if the tribunal decides the FCA can push ahead with its ban, Burns will be blocked from holding senior management positions or roles which would give him significant influence over regulated activities in the financial services sector.
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"As a director Burns was required to take reasonable steps to ensure TailorMade complied with regulatory standards," the decision notice from the watchdog read. "In the FCA's view he did not do so.
"The Authority has decided that he is not fit and proper to perform senior management or significant influence functions in relation to regulated activity in financial services. This is on the basis of his lack of competence to perform such functions."