FSA fines two former directors of Alpha to Omega IFA network

The Financial Services Authority (FSA) has today fined two former directors of Alpha to Omega (UK) Limited (A2O), an Independent Financial Adviser network.

The two directors, Andrew Ruff and Richard Lindley, have been fined GBP28,000 and GBP14,000 respectively for widespread compliance failings which led to the risk of customers receiving unsuitable investment advice. Andrew Ruff has also been banned.

In March 2009, the FSA undertook a review of some customer files of an appointed representative of A2O. As a result of that work, A2O was required to appoint a skilled person to review the compliance systems at A2O. The skilled person highlighted widespread compliance failings at the firm which led to the risk of customers receiving unsuitable investment advice. This was particularly problematic where customers had been recommended high risk investments such as certain Unregulated Collective Investment Schemes (UCIS schemes).

A2O agreed to stop its appointed representatives recommending a number of UCIS schemes. However, A2O failed to make the necessary improvements to its compliance systems and on 18 January 2010 FSA required A2O to cease conducting all regulated activities.

Ruff and Lindley have been fined because:

• they were responsible for the control and monitoring of the sales made by A2O's appointed representatives and failed to do this effectively;
• they failed to ensure systems and controls weaknesses were addressed and they lacked control and oversight over the network of advisers which led to the risk that its appointed representatives were not offering suitable advice and treating customers fairly;
• A2O failed to collect relevant and accurate management information to enable them to adequately identify, monitor and mitigate the compliance risks to which the business was exposed; and
• they failed to take appropriate action to correct the behaviour of appointed representatives when they became aware of potential compliance risks.

Ruff has been banned as he was primarily responsible for the compliance arrangements at the firm. He failed to ensure that A2O had adequate compliance monitoring procedures in his role as Compliance Director of A2O.

Tracey McDermott, acting director of enforcement and financial crime, said:

''Lindley and Ruff shared the ultimate responsibility for ensuring the financial advice provided by their network of advisers was suitable for their clients. They both failed in their responsibilities and this resulted in unsuitable advice being provided to some clients.

"Those who oversee networks of appointed representatives need to ensure that they keep a close eye on the advice being given throughout their network, especially where the advice includes high risk products such as UCIS. If there are failings in the way customers are treated anywhere in the network, the principals will be held to account."

« Back to news articles