IFAOnline November 2006
Care fees specialist Symponia has called for Criminal Record Bureau (CRB) checks to become mandatory for all financial advisers.
The long-term care specialist intemediary has spoken out after Philip Smith, 48, of Bowdon, Cheshire, a former financial adviser - although he was not authorised by the Financial Services Authority to work as a financial adviser - was sentenced to nine years in prison earlier this week for stealing £2.3m from at least 50 clients to fund an addiction to gambling.
Smith had previously been found guilty of 49 counts of theft, five of money laundering, two of false accounting and three forgeries.
Symponia says such actions have now made criminal checks a necessity for financial advisers, particularly where they deal with elderly and vulnerable people.
Janet Davies, managing director at Symponia, says most IFAs would welcome mandatory CRB checks.
“Preying on elderly or unwell people is despicable and should be condemned in the strongest terms; every professional financial adviser will echo that sentiment. Symponia’s message to the Financial Services Authority is make CRB checks a normal part of every financial adviser’s authorisation process; this may go some way to making slippery, criminal financial advisers a thing of the past.”
But Linda Chandler, technical officer for financial crime at the Association of IFAs (AIFA), says CRB checks would make little difference and suggests such a check would not have stopped Smith from committing the crimes he did.
“The IFA in question did not have a criminal record so it [CRB check] would not have helped,” she says.
Chandler says AIFA did look at providing checks as an implementing body for the CRB to help members in the recruitment of advisers but decided this was unnecessary. She adds the FSA does not require IFA firms carry out CRB checks but rather that they perform whatever checks they feel are necessary to decide whether a potential employee is a fit and proper person.
Symponia says it is currently lobbying the FSA for tighter regulation and changes to its CF8 qualification which came into force this week.
But Sam Bennett, a spokeswoman for the FSA, says such changes are unlikely. “We receive 40,000 applications for authorisation a year and to carry out CRB checks on all of those would mean the authorisation process would be significantly slowed down.
“We put the onus on firms as to what checks they carry out and it’s up to them to decide whether criminal checks are necessary.”