On May 11, the Financial Services Authority (FSA) has fined Charterhouse Consulting Wealth Management Limited (Charterhouse) £122,500 (approximately $240,000) for carrying out discretionary portfolio management without permission and for various conduct of business failings.
Charterhouse did not have the appropriate regulatory permission to act as a discretionary investment manager. The FSA found that Charterhouse would often send clients an email before 6.30 am in the morning proposing the switching of funds and requiring a response by 8.00 am. Switches would then take place without any instruction from the client. Charterhouse also failed to record sufficient “know your client” information to demonstrate the suitability of its advice, it failed to ensure transactions were appropriate for customers in light of their attitude to risk and it failed to communicate with its clients in a clear, fair and not misleading manner.
The FSA stated that the fine imposed took into account the mitigating steps taken by Charterhouse to prevent a recurrence of these rules breaches Charterhouse also agreed to settle at the earliest opportunity. The fine would otherwise have been £175,000 but the actual penalty reflected a 30% discount.