The FCA has restricted Campbell & Associates Independent Financial Advice Ltd of Hants after concerns about £1.5m in client funds being potentially ‘misappropriated’.
The restrictions prevent the firm (FRN 602550) from carrying out any regulated activities.
The firm, based in West Wellow near Southampton, has also been restricted from accessing its assets due to FCA concerns about the “potential misappropriation of client funds.”
The FCA said it had “very serious concerns about the conduct” of the firm and believes that the firm’s sole director may have misappropriated £1.5m of a client’s funds and failed to repay the client’s funds as promised.
It’s the second time this month that the FCA has restricted an IFA firm after Nexus Independent Financial Advisers and Nexus Investment Managers – based in Fareham, Hants – were restricted by the FCA from carrying out regulated activities over client money irregularities totalling more than £2m. It’s not believed the two firms are connected.
Campbell & Associates has the right to appeal the First Supervisory Notice issued by the watchdog this week.
According to the First Supervisory Notice, in July 2022, a consumer transferred a total of £1.5m to the firm’s bank account having accepted the firm’s advice to invest in bonds due to mature in January 2023. The firm does not have permission to hold client funds.
The consumer was told that the funds were to be invested in bonds issued by a bank, however the bank has confirmed that it does not offer such bonds and has no record of any investment having been made.
The regulator said that analysis of the firm’s bank statements shows that, contrary to what the consumer had been told, the funds were not invested in any kind of investment.
In fact, the statements appear to show that between July 2022 and January 2023, the consumer’s funds were transferred to the personal accounts of the firm’s director or otherwise used to purchase a property for the firm’s director to live in.
The consumer repeatedly contacted the firm to arrange for their investment to be repaid. In response, the firm’s director advised the consumer to “roll-over” the investment and claimed that the repayments had been made, later claiming the repayments were being erroneously held up by the firm’s bank. The firm then claimed that the investment had been accidentally rolled over and could not be repaid, according to the notice.
The watchdog said that analysis of the firm’s bank accounts shows that the firm’s director had misappropriated the great majority of the funds and there were insufficient funds in the firm’s bank account to make the repayment. The firm has since repaid a proportion of the funds, however £1.15 million remains unpaid, along with any accrued interest.
Once the consumer had expressed their concerns to the firm’s director about their failure to repay the funds owed, the firm’s director appears to have falsely claimed, on 26 January 2023, that their plan of action to remedy the issue included a meeting that they had scheduled with the FCA. The FCA said that the firm’s director had not made contact with the authority in connection with this matter and no such meeting was ever scheduled.
The firm was incorporated as Campbell & Raffle Independent Financial Advice Ltd on 14 February 2013 and was authorised by the FCA to perform regulated activities. The firm changed its name to Campbell & Associates Independent Financial Advice Ltd on 18 November 2020. It has permissions to provide advice and arrange deals in investments and pensions.
