The U.K. Financial Services Authority fined Savoy Investment Management Ltd. 412,000 pounds ($655,000) for failing to ensure the suitability of the investment portfolios of its wealth-management clients.
Savoy failed to keep adequate records of clients’ finances, leading to a risk that investment managers were making decisions “that did not match clients’ expectations and their attitude to risk,” the London-based regulator said in an e-mailed statement today.
“It is critical that wealth management firms properly identify and record client needs and monitor the suitability of their advice and discretionary management services,” Tracey McDermott, director of enforcement and financial crime at the FSA, said in the statement.
The FSA carried out a review of conflicts of interest at asset management firms between June 2011 and February this year and said it would select some firms for follow up visits. The regulator said it observed poor practices including the favoring of certain customers over others, failing to report trading errors and inconsistent policies regarding the personal trading accounts of fund managers.
“This is clearly a significant fine but we have chosen to accept the FSA’s findings and agree an early settlement with them to allow our business to move forward,” Jonathan Polin, chief executive officer of Savoy’s parent company, Ashcourt Rowan (ARP) Plc, said in a statement today.
To contact the reporter on this story: Ben Moshinsky in London at email@example.com;
To contact the editor responsible for this story: Anthony Aarons at firstname.lastname@example.org.