FSA slams broker misuse of client money
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Two insurance brokers are facing the wrath of the FSA after being accused of failing to adequately protect clients’ money and assets.
Delwyn Way of Shield Insurance Consultant Ltd and Adrian Shillaker of Griffiths McAlister Insurance Brokers Ltd are being hit with strict punishments.
Shield director Way has landed with a £77,957 fine and banned from working in financial services after failing to ensure their insurance premiums were passed onto insurers.
The fine covers the estimated amount of client’s money Way diverted into personal business ventures.
Griffiths McAlister’s director, Adrian Shillaker, has been banned from working in financial services with immediate effect for knowingly transferring client money to fund business expenses for his firm.
Shillaker also failed to segregate client money from other funds in breach of the FSA’s Client Money rules has also cancelled the permission of the firm.
Shillaker avoided a fine as he proved it would cause him hardship and has taken steps to repay monies owed.
Margaret Cole, FSA director of enforcement and financial crime, says: “It is essential that customers have confidence their money and assets are safe and that firms holding their money have strong management oversight and control over their business. It is simply unacceptable that these two individuals have failed to ensure their clients have the appropriate protection in place and as a result we have taken firm action.
“Firms must take their responsibilities to protect client’s money and assets very seriously and we have clearly set out our expectations in this area. In particular, firms must not mis-use client money, they must keep it separate from all other funds in an appropriate trust account, and client money must not be rendered vulnerable to loss or reduction.”
The FSA has established a new unit to strengthen the FSA’s capabilities in the area of client money and assets with teams responsible for specialist supervision, policy, data analysis and risk management.
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