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Invesco Perpetual fined £18.6m by FCA



The UK’s largest retail investment firm has been dealt an £18.6 million fine by the city regulator over “failings in fund management”.

The Financial Conduct Authority (FCA) announced the fine on Monday, saying that Invesco Perpetual had led investors to believe that the risks that were being taken were less than in reality. The regulator also criticised the firm for failing to comply with investment limits, measures imposed to protect consumers from exposure to risks.

A statement on the regulator’s website says, “As a forward looking regulator the FCA takes action where we see risks to consumers, not just after they suffer losses.

“In this case investors of all sizes trusted Invesco Perpetual to manage their money.  They signed up for a certain level of risk but we found Invesco Perpetual’s actions were at odds with investors’ reasonable expectations.”

The investigation found that employees at the firm broke FCA rules on 33 occasions, occurring across 15 of the funds, representing more than 70% of the assets under management. It also concluded that the managers didn’t communicate clearly the use of derivatives.

In addition, the regulator found that Invesco Perpetual failed to record trades within the given timescale, meaning that the funds could have been set at the wrong price.

The firm acknowledged that it had fallen short in meeting the required standards as laid down by the FCA, adding that the investors affected had been reimbursed.

Mark Armour, CEO of Invesco Perpetual, said, “This refers to a period between May 2008 and November 2012, and the FCA has noted that Invesco Perpetual acted promptly to enhance its systems and controls.

“We are confident that our systems and controls are now strong, effective and compliant with all applicable regulations. The small number of impacted funds were fully reimbursed. In this instance, we clearly fell short of the high standards we consistently strive to deliver. However, we are pleased that this matter has been fully resolved with the FCA and is now closed.”

Photo: images money via flickr

Further reading:

FCA handed fines to just 18 City executives in 2013 – down 40% in four years

Santander fined £12.4m for unsuitable financial advice

FCA: changing culture at financial services firms won’t be a quick job

1 in 10 financial services firms have risky incentive features

FCA plans inquiry into 30m insurance policies


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