Savoy has been accused of failing to take reasonable care in ensuring the suitability of investment portfolios of its wealth management clients.
In addition to allowing its investment managers a high degree of discretion to advise its wealth management clients on their investment portfolios, the company had limited front office controls and its other processes failed to ensure the suitability of its advice and portfolio management, revealed FSA.
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Due to the failings, a review of a sample of files found 23% of them showing a high risk of unsuitability, denoting chances of high risk that investment managers were making investment decisions that did not match clients’ expectations and their attitude to risk.
Tracey McDermott, director of enforcement and financial crime at the FSA, said: "Savoy failed to record and maintain enough client information to control the risk of unsuitable investment portfolios for its wealth management clients. From as early on as 2009, Savoy was aware of deficiencies in its client records but failed to take action, meaning that these failings persisted for 22 months."
Meanwhile, Savoy is doing past business review of its investment services to its wealth management clients, which will determine whether clients need to be compensated.
The company has agreed to settle at an early stage and qualified for a 30% discount, without which the fine would have been GBP590,000.
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By GlobalData
