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Troubled wealth firm stops new business after FCA agreement

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Troubled wealth firm stops new business after FCA agreement

Troubled Sipp provider and wealth firm Greyfriars Asset Management has agreed with the Financial Conduct Authority (FCA) to not accept any new client money or custody assets.

Founded in 1989, Leicester-based Greyfriars is an advice firm, Sipp and SSAS administrator and was until recently a discretionary fund manager (DFM) for its advisers and external IFAs.

In November 2016, Wealth Manager sister title New Model Adviser® revealed Greyfriars came to an agreement with the FCA to stop accepting new money into its DFM’s Portfolio Six.

New Model Adviser® found many of the investments within Portfolio Six were unregulated overseas property-based corporate bonds. At least one of these underlying P6 investments has since gone into administration.

There is no suggestion the P6 investments are connected to the latest permission restriction.

Greyfriars has also faced a section 166, or skilled person review, ordered by the FCA, which it has acknowledged could lead to a possible fine. It has also closed down its DFM service for its own advisers with £60 million moving to Seven Investment Management (7IM) and LGT Vestra.

Now a new, more extensive permission restriction has appeared on Greyfriars’ FCA Register, which says the firm:

  • will not accept any new client money or new custody assets, whether from existing or new clients;
  • will not carry out any regulated activities for new/existing clients or new business activity (with exceptions, see below);
  • the only way the firm can carry out these regulated activities is if they are for existing clients, are fulfilling contractual and regulatory requirements to conduct reviews of customers’ investments and if the review is approved by a third-party compliance consultant;
  • Greyfriars must write to all its clients and financial advisers with the details of these requirements as well as publish a notice on the front-page of its website;
  • and an asset retention requirement has also been placed on the firm meaning it cannot dispose of or sell its assets including client money and custody assets without the FCA’s consent.  

Although the FCA restriction means Greyfriars cannot accept new money, the regulator did say it can still provide pension administration and safeguarding for existing clients, which means clients in drawdown can still receive their payments.

The restriction on its regulated activity also applies to its seven appointed representatives, the FCA note said.

As well as working with a number of IFAs, Greyfriars acts as a pensions/ISA administrator and a custodian for some robo-advisers, including evestor and Moneybox.

Anthony Morrow, evestor’s chief executive, said the robo-adviser is now changing its arrangements for its pensions and ISAs by gaining its own pension permissions. 

‘We treat the custody and security of our client’s money as the highest priority,’ he said.

‘As soon as we became aware Greyfriars were no longer able to meet the standards we set, we took decisive steps to find another solution and are currently in the process of obtaining the necessary permissions to bring all of the pension and platform operations in-house. This will ensure we can have full control of the service levels we provide to our customers. There have unfortunately been a few technology issues around payments but these are largely resolved now.’

Moneybox was unavailable for comment when approached. However, in a message seen by New Model Adviser®, Moneybox told its customers earlier this month it will now act as its own platform provider for its ISA and Jisa products with Winterflood Securities as its custodian.

New Model Adviser® contacted Greyfriars to ask why the latest permission restriction had been put in place, however we have not received comment at the time of writing.

The FCA declined to comment.

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