20th March 2015
The City watchdog has banned and fined two former directors of advice firm TailorMade Independent after they put over £100 million of client money at risk.
The Financial Conduct Authority (FCA) fined Lloyd Pope £93,000 and Peter Legerton would have been fined £84,000 if it were not for financial hardship and banned the two from holding senior positions in financial services.
Betewen 2010 and 2013, TailorMade advised 1,661 clients to invest money through their self-invested personal pension. This money went into oversears property operating by the ill-fated Harlequin group of companies and put £112.4 million of customer money at risk.
Pope and Legerton failed to identify and manager conflicts of interest when investing clients and did not do adequate compliance, which had been outsourced.
Legerton benefited financially from these conflicts of interest, according to the FCA, as TailorMade was an introducer for unregulated investments – like those offered by Harlequin – and introduced the vast majority of the advice business clients to the investments.
He received commission when investments products were sold either through a Sipp or directly and between 2010 and 2013 he made a total income of £300,567 from TailorMade.
TailorMade is now in liquidation and the Financial Services Compensation Scheme has so far paid out £3.1 million to 75 investors from the 323 claims it has received.
Georgina Philippou, acting director of enforcement and market oversight, said: ‘Pope and Legerton exposed customers to risky investments without considering if these products met their needs.
‘Their actions mean many customers face losing all of their hard-earned pension funds and fell woefully short of the standards we expect of senior individuals.’