Release Date: 13th August 2015
To access the original FCA document, click here.
Summary
Robert Shaw, former director of TailorMade Independent Ltd (TMI), has been banned from senior positions in financial services and fined £41,400 by the Financial Conduct Authority (FCA). Shaw failed to ensure that TMI assessed the suitability of investments made through self-invested personal pensions (SIPPs) and did not manage conflicts of interest appropriately.
The FCA found that Shaw exposed customers to high-risk investments without considering their suitability and personally benefited from these sales without fully disclosing the extent of his financial gains. Shaw’s actions resulted in many customers facing the potential loss of their pension funds. Additionally, Shaw failed to act on warnings from TMI’s external compliance consultants regarding conflicts of interest.
Between 2010 and 2013, TMI advised customers to transfer their pension funds into unregulated investments such as green oil, biofuels, farmland, and overseas property via SIPPs. More than half of these customers invested in overseas property operated by the Harlequin group of companies, which are under investigation by the Serious Fraud Office. TMI ceased trading and has since been dissolved. The Financial Services Compensation Scheme (FSCS) is investigating claims and has paid compensation to 1,245 of TMI’s customers.
Key Takeaways for Other Firms:
- Assess Suitability: Ensure all investments are suitable for the client’s needs and financial situation.
- Manage Conflicts of Interest: Identify and disclose any conflicts of interest to clients to maintain transparency and trust.
- Respond to Compliance Warnings: Act promptly on any compliance warnings or recommendations to avoid regulatory breaches.
- Provide Clear Disclosures: Fully disclose any personal financial benefits gained from recommending certain investment products.
- Adhere to Regulations: Regularly review and update practices to ensure they comply with the latest regulatory requirements.
By following these principles, firms can protect their clients, maintain regulatory compliance, and avoid substantial penalties.
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