Financial services firm STM Group has agreed to appoint Deloitte to carry out a skilled person review which looks into how the company dealt with advisers and their clients.
At the end of 2017 the Gibraltar financial regulator announced its intention to appoint inspectors to investigate compliance and governance concerns at the firm.
STM launched a legal challenge against the regulator, with a hearing scheduled for 22 January. However the firm has now agreed to appoint Deloitte to carry out the UK equivalent of a section 166 report on the firm, meaning the legal challenge will no longer take place.
The review will cover the same ‘scope’ as the Gibraltar financial regulator's inspection would have and will look into STM's compliance unit and corporate governance.
The external review will also provide ‘an assessment of any potential conflicts of interest arising across the business. The review will also cover certain specific areas in relation to the pensions and life assurance business relating to take-on and monitoring procedures for intermediaries, clients and investments advised by intermediaries.’
Separate to the investigation by the Gibraltar regulator, STM’s chief executive Alan Kentish was released from arrest without charge in an unrelated investigation led by the Gibraltar police in 2017.
Kentish said: ‘It is pleasing that the Gibraltar subsidiaries have been able to come to a workable solution with the Gibraltar regulator, rather than pursuing their case through the courts which, at the end of the day, is in neither party's interest. We look forward to working with Deloitte and the GFSC (Gibraltar Financial Services Commission).’
STM said the skilled person review will ‘incur costs’ but the company has ‘not experienced any adverse effects to trading as a result of these matters'.
STM also owns UK-based Sipp provider London & Colonial. The skilled person review will focus on the Gibraltar-based business rather than the London operations.