Lax supervision exposed network's ARs to crime
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A lack of supervision resulted in a number of appointed representatives of Julian Harris Mortgages facilitating financial crime, says the Financial Services Authority.
Last week the FSA fined Julian Harris, the sole shareholder of network Julian Harris Mortgages and sole shareholder of IFA network the Julian Harris Consultancy, £49,000.
It also banned him from performing a compliance oversight function and from acting as compliance officer.
In its final notice to Harris the FSA says: “The ARs were exposed to the risk of being used to facilitate financial crime and in respect of some ARs it appears that this risk crystallised.”
Some 78% of AR files reviewed by the FSA did not demonstrate that the customer had received suitable advice and 9% demonstrated unsuitable advice had been given.
The FSA also found the network had an inappropriate level of resources to monitor ARs and at one point had 70 ARs assigned to one training and competence adviser.
Gemma Harle, managing director of TenetLime, says that with the huge amount of compliance and regulatory material coming out of the FSA networks need a large team of people to interpret the rules.
She says: “As well as being the sole shareholder and proprietor, Harris was also the individual responsible for compliance related matters, which is a big responsibility and raises questions about how stable that model is.”
Harris has now appointed a new head of compliance.
A spokesman for the network says: “We believe this action has put us in a stronger position and we are optimistic about our future and our offering in the marketplace.”
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