The Financial Markets Authority (FMA) has warned an individual in relation to suspected misleading or deceptive conduct by a registered financial adviser. Following an investigation by the FMA, it concluded that the registered financial adviser had engaged in misleading or deceptive conduct when he:
- advised his clients of an alternative life cover plan with a different insurance provider but did not provide them with any information about policy pricing. The individual then provided a direct debit form to his clients for them to complete which his clients ignored;
- completed and submitted the direct debit form on his clients’ behalf without authority;
- completed and submitted a declaration of good health on his clients’ behalf without authority.
The FMA has completed its investigation and determined that the appropriate response that is proportionate to the misconduct in this case is to issue a warning to the individual. The FMA must also consider public interest factors when making its decisions, those specific factors in this case included:
- The individual has voluntarily deregistered from the FSPR and, consequently, removed himself from the financial advice and insurance industry. No threat is posed to future or existing clients;
- The individual’s employment was terminated;
- The FMA is satisfied that the incident was a one-off and of a low monetary value. The individual’s employer has reviewed all relevant files and has identified no other misconduct;
- The individual had made no financial gain;
- The clients suffered no monetary loss and remain insured;
- The individual considered the product was appropriate for his client when recommending the policy change.
All of these factors and that the individual co-operated with the FMA during its investigation, led to the decision not to name the individual concerned.
Sales and advice is a key strategic priority for the FMA whether provided by individual advisers or within licensed QFE firms. The FMA is focused on ensuring the customer’s interests are properly considered in advice on, or the sale of, financial products, including insurance. While the FMA was satisfied in this case that the individual considered that the product was appropriate for his clients, by completing and submitting the relevant forms without authority his conduct was nonetheless unacceptable.
The FMA will take action in order to denounce and deter misconduct. In this case, the FMA is satisfied that the public interest supports a warning rather than prosecution.