Beleaguered asset management firm Greyfriars ran into trouble in November 2016 when the Financial Conduct Authority (FCA) rescinded the company’s permissions for accepting new investments into its portfolio. This significantly altered the company’s business model, effectively removing its discretionary fund management (DFM) status. The problematic portfolio was believed to be a factor in further FCA action against Greyfriars in May 2017.
Greyfriars was restricted yet again this month, as the FCA removed the firm’s rights to accept client money or custody assets from new clients. This follows a skilled person review, or a section 166, which was ordered by the FCA in the spring of last year. Greyfriars is now incapable of carrying out much of its established business and has suggested that existing clients might wish to consider seeking advice from an alternative financial advisor.
Greyfriars Responds to Latest Restrictions
In a letter delivered to a number of Greyfriars clients, the firm acknowledged the stopping-block of the FCA’s latest restrictions. They claimed that the firm has been prevented from being able to offer regulated financial advice for existing and new clients, presenting a significant challenge to the firm going forward. Greyfriars aims to continue providing ‘administration services to the products and investments [clients] hold as a servicing agent.’
However, the reality of the scenario is that clients will be forced to look elsewhere to ensure their investments are maintained by regulated officials. The letter read:
‘It is important you review all aspects of your circumstances, and the investments you hold to ensure they continue to meet your objectives that were previously agreed…as a valued client of Greyfriars, we understand that you may wish to receive regulated financial advice. While we are unable to recommend other parties who will be able to offer such advice, we would bring to your attention www.unbiased.co.uk.’
Neither Greyfriars nor the FCA has commented on the reason behind these restrictions, but independent investigations have linked the DFM aspect of Greyfriars’ business to high-risk alternative investments. While there is no conclusive evidence to confirm this theory, representatives of the firm have openly accepted that the results of the section 166 review could result in a substantial fine.
Read more about the restrictions placed upon Greyfriars Asset Management here.
About Money and Me Claims
At Money and Me Claims, we believe it is critical to monitor changes in the financial markets, particularly if those changes are instrumented by the FCA. We aim to share this information with you in as much detail as possible, so you are aware of any potential instability with companies or investments that you may be involved with.
In some scenarios, similar changes could be indicative of historical mis-selling of self-investment personal pensions (SIPPs). Alternative investments are rarely suited to retail investors. We have witnessed far too many cases where clients have been encouraged to transfer funds into portfolios where high-risk products form the underlying investments.
If you would like any more information, please do not hesitate to contact us.