New Model Adviser - For professional financial planners

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.
6399.73 + 27 0.43% 04:35

Berkeley Berry Birch suspended in double whammy

Shares in Berkeley Berry Birch (BBB), the UK’s seventh largest Independent Financial Adviser, have been suspended pending continued investigation into the firm’s finances by the Financial Services Authority (FSA).

A statement released today said that the company (BBB) had requested a temporary suspension of trading in its shares with immediate effect pending ‘clarification of its financial position’.

The suspension comes five months after the FSA announced that it had revoked the licenses of three of BBB’s regulated businesses – Berkeley Independent Advisors (BIA), Weston and BBNFP - due to regulatory capital shortfalls.

As of 30 September these businesses had a combined capital resource shortfall of nearly £11 million.

The company has referred the decision notices from the FSA to the Financial Services and Markets Tribunal and said it planned to rectify the shortfalls through a mixture of planned disposals and equity raisings.

While the FSA is to continue its assessment of BBB’s capital adequacy position, its investigation into Berkeley Independent Advisers' breaching of systems and controls rules, has come to an end.

The FSA today ruled that the firm had failed to adequately monitor and assess the suitability of a sales strategy that advocated the sale of non-pension products as an alternative means to of saving for retirement.

Margaret Cole, director of enforcement at the FSA said the breaches by BIA, which occurred between December 2001 and September 2004, had been ‘particularly serious’ and merited a proposed fine of £425,000. However, the company’s current financial plight militated against such decision and has resulted in the imposition of a public censure instead.

‘The failings were made worse by the fact that BIA had received several warnings about the way the products were being sold, yet failed to take the necessary steps to rectify the situation,’ added Cole. ‘It is the responsibility of senior management to ensure that systems and controls are put in place in firms to ensure that customers are treated fairly and retail consumers achieve a fair deal.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.