FCA bans and fines financial adviser £68,300 for lacking honesty and integrity
On 15 April 2021, the FCA banned Simon Varley from working in financial services and fined him £68,300 for knowingly performing a controlled function without approval and for providing investment advice to retail customers when he knew he was not qualified or approved to do so. The FCA also found that Mr Varley failed to act with integrity as a Director (CF1) and Compliance Oversight (CF10) controlled function (CF) holder and is therefore not a fit and proper person.
Mr Varley worked at Dickinsons Financial Management Limited (Dickinsons), a small financial advisory firm where he held a customer adviser function (CF30) until January 2013. Following the Retail Distribution Review, the FCA introduced rules requiring that advisers hold a minimum level of qualification to be approved for a CF30 function. Although his CF30 approval was removed in January 2013 by the FCA at his request, Mr Varley still continued to advise retail customers between January 2013 and September 2017.
Mr Varley repeatedly misled his fellow directors by providing false information in board meetings about sitting and passing the relevant exams required for him to continue advising, and falsely claiming that he had applied to the FCA for approval as a CF30 but that the FCA had not updated the Financial Services Register. In fact, no application was ever made. Mr Varley also knowingly facilitated the provision of false information to Dickinsons’ PII (professional indemnity insurance) providers about the qualifications he held, in order to be insured to advise retail investors after 2013.
As part of his CF10 function, Mr Varley was required to provide regulatory information to the FCA in Dickinsons’ Retail Mediation Activities Returns. In discharging this responsibility, Mr Varley knowingly misled the FCA into believing that only 1 person at Dickinsons was providing retail investment advice to customers instead of 2. He also provided explanations to the FCA that were untrue to conceal his own misconduct.
The false information provided to Dickinsons’ PII providers and to the FCA created the potential risk of loss to consumers, as Mr Varley was not qualified to provide the advice and, subsequently, his advice was deemed to be uninsured. Mr Varley’s actions led to Dickinsons going into voluntary liquidation and being dissolved.