The FSA on Wednesday ordered Deloitte & Touche Wealth Management, which is owned by the UK partnership of Deloitte, to pay £750,000 for systematic and prolonged compliance failures.
It found that DTWM, which offers personal financial advice on pensions and tax matters, had kept inadequate records in 97% of cases reviewed and failed to properly supervise its advisers during 1997-2001.
The FSA blamed the ‘wholly unaccptable approach’ of DTWM’s senior management, which it said had failed to heed warnings on non-compliance.
It said Deloitte’s co-operation with the investigation and a change of management in 2002 had helped it to avoid a greater penalty. The City regulator indicated it might otherwise have considered the cancellation of DTWM’s permission to conduct regulated activities.
Gerry Paisley, managing partner responsible for regulation and risk management at Deloitte, said: ‘We very much regret this matter, which arises from regulatory failures [at DTWM] between 1997 and 2001. When the issue was identified, swift and decisive action was taken to shut down the business, which was subsequently restarted under entirely new management.’
The FSA also pointed to DTWM’s failure to properly inform Deloitte of risks, prompting fears of similar communication deficits at other subsidiaries.
A Deloitte spokesperson said: ‘DTWM was unique in terms of being a stand-alone business having direct responsibility to the regulators. We have taken active steps to ensure that DTWM practices the same level of openness and sharing of information as the rest of the firm.’
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