The FCA has restricted business at London IFA firm Independently East Ltd (IEL) (FRN488046) after it failed to pay a £70,000 Ombudsman award to a client.
The FCA says there is evidence that at least some of a client’s money, which should have been paid into a bond, was instead transferred into a personal account of the director.
In recent months the FCA has placed a number of restrictions on the firm, including freezing its bank accounts and cancelling its permissions to carry out regulated activities.
The FCA said it had acted due to the failure of IEL to pay the Ombudsman award, concern about a lack of resources at IEL and failure of the firm to engage with the FCA in an “open and co-operative” way.
The FCA register lists the firm’s location as Walton on Thames but the firm’s website lists the company as operating from an address in Robin Hood Lane, London SW15.
On 13 February, the FCA imposed significant restrictions on Independently East Ltd (IEL) which has been regulated since 2008.
The FCA said it acted because of: “Our concerns with Independently East include whether it can be effectively supervised and holds appropriate resources. It has not provided us with the information we requested about its clients, financial position, or a Financial Ombudsman Service award it was due to pay out.
“The outstanding Financial Ombudsman Service award is for an upheld complaint by a consumer who paid £70,000 into Independently East’s business account. The consumer understood these funds would be used to invest in a bond.
“We have looked into this investment and found no evidence to suggest that the money transferred by the consumer to Independently East was invested in a bond or any other form of investment. It also appears that some of the consumer’s funds were transferred to a personal account of the director.”
According to the FCA First Supervisory Notice on 20 September 2022, the FOS upheld a complaint by a customer of IEL’s, Mr B, against IEL. Mr B paid a total of £70,000 into IEL’s business account.
However, IEL did not provide Mr B with any documentation to support the investment. Mr B understood that his money would be paid into a bond with a 3.25% interest rate below £50,000 and a 4.25% interest rate above that sum. Mr B raised a complaint with the FOS to recover his initial investment and interest.
The complaint was upheld on 20 September 2022 on the basis that IEL failed to provide Mr B with any information regarding his investment in a bond, including the name of the provider. In addition IEL did not arrange the intended investment discussed with Mr B.
The FOS award, which was accepted on 4 October 2022 by Mr B, requires IEL to pay him £70,000 plus interest calculated at 1.5% per annum plus £500 for the distress and inconvenience that was caused. The FOS made a number of requests for information from IEL about Mr B’s investment in the bond, but no documentation was provided nor was the name of the investment provider ever given.
On 27 September 2021 the FOS requested IEL’s files and submissions. On 13 and 14 October 2021 IEL confirmed the requested documentation would be forwarded to the FOS and that it would make submissions in response to the complaint. The FOS made further attempts to contact IEL without success, according to the notice.
The FCA said IEL can continue dealing with or disposing of any of its own assets in the “ordinary and proper course” of its business up to a limit of £1,000 (or £5,000 for legal fees).
