Integrated Financial Arrangements has been fined by the Financial Services Authority (FSA) for breaching client money rules for a significant period of time and failing to protect client money.
As per FSA’s client money rules, client money should be kept separate in bank accounts with trust status so that in the event of the firm’s insolvency, money is returned to clients quickly and easily.
FSA had alleged that Integrated Financial failed to comply with the money rules between 1 December 2001 and 30 June 2010 though it had separated client money from its own money upon receipt.
The non compliance over the period of time led to money belonging to one client being used to cross fund other clients thereby putting client money at risk in the event of the firm’s insolvency. The amount of client money held by Integrated Financial during the period averaged £508m.
Integrated Financial has agreed to settle £3.5m as fine after qualifying for a 30% discount.
The company will appoint a skilled person to review its client asset processes and will comply with the recommendations provided.