Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FCA hits Aberdeen with £7.2m fine for client money failings

FCA hits Aberdeen with £7.2m fine for client money failings

The Financial Conduct Authority (FCA) has fined Aberdeen Asset Managers and Aberdeen Fund Management £7,192,500.

It handed out the penalty for failing to identify and therefore properly protect client money placed in Money Market Deposits (MMDs) with third party banks. The FCA said the failings took place between September 2008 and August 2011.

The average daily balance in MMDs affected by the failings was £685 million.

In a statement, the FCA said that Aberdeen had incorrectly determined the money was not subject to its rules, which meant it did not obtain the correct documentation from third party banks when it set up the accounts.

The FCA said Aberdeen also used inconsistent account naming, and this created additional uncertainty over who owned the funds.

FCA director of enforcement and financial crime Tracey McDermott said: 'Proper handling of client money is essential in ensuring markets function effectively.

'Where they fall short of our standards, firms should expect the FCA to step in and take action.'

Aberdeen, which is headed by Martin Gilbert (pictured), confirmed in a separate statement it had received a £7.2 million fine from the regulator and that the penalty was in full and final settlement for the failings identified by the FCA.

'No clients suffered any loss as a result of the breaches and at no point were client funds mixed with Aberdeen’s own money,' the firm said.

'Nor was there any risk of any client money being lost as a result of setoff, as Aberdeen did not have any borrowings with any of the relevant banks, although there was a risk clients could have potentially faced a delay in the return of their money in the highly unlikely event that Aberdeen became insolvent.

'We regret that the situation arose, have co-operated fully with the FCA in the course of its investigation and have amended our UK procedures regarding bank deposits following the FCA’s guidance.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Taxicab Tenner: AXA IM's Nicolas Trindade

Taxicab Tenner: AXA IM's Nicolas Trindade

After a summer break, it is the turn of AXA Investment Manager's Nicolas Trindade to give a £10 view of how fixed income is faring.

Play Wealth Manager Olympics: the Relay

Wealth Manager Olympics: the Relay

In the final round of the Wealth Manager Olympics, our intrepid athletes team up for the relay.

Play Wealth Manager Olympics: the Shot Put

Wealth Manager Olympics: the Shot Put

After busting a gut in the 100m sprint, our wealth manager Olympians displayed their brute strength in the shot-put.

Read More
Your Business: Cover Star Club

Profile: gearing up for the shift from consolidation to start-ups

Profile: gearing up for the shift from consolidation to start-ups

‘I think the industry is evolving rapidly, but not necessarily as a whole,’ says the head of recently launched Charles Nicholson AM

Wealth Manager on Twitter