The UK regulator, the Financial Services Authority (FSA), has levied its heaviest fine ever on a private wealth management firm by charging Deloitte & Touche Wealth Management Limited (DTWM) 750,000 for failing to complete its review of pension plan mis-selling and for inappropriate selling of split capital investment trusts – vehicles which were the subject of a major financial scandal in the UK last year. The inability to complete the pensions review reflected poor record-keeping. In 97% of cases, the firm was unable to determine whether its advice was appropriate or not.
DTWM is a subsidiary of one of the Big Four accountancy firms, Deloitte & Touche, which is already reeling from the fall-out of the Parmalat scandal. The FSA said the offences were so serious that it had come close to requiring the firm to stop trading. During the period in question – 1997 to 2001 – DTWMs regulated investment business was estimated at approximately 10% of DTWM’s total revenue and the number of clients DTWM had serviced ranged from 1,177 in 1999 to 640 in 2001. During the period, DTWM operated 12 branches in the UK, which provided investment advice. The numbers of staff authorised to give financial advice varied between branches. London (33 advisers) and Cambridge (14 advisers) were the largest.