The FCA has imposed a number of restrictions on a senior manager at an IFA firm where £1.5m of client funds may have been misappropriated.

The regulator has placed the restrictions on Lisa Campbell, a senior manager at Campbell Associates Independent Financial Advice in West Wellow (FRN 602550), near Southampton.

The FCA has also told the firm to cease all Part 4A regulated activities, effectively halting most regulated business.

The FCA placed restrictions on the firm in February over concerns that about £1.5m in client funds had potentially been ‘misappropriated.’

The conditions now prevent Mrs Campbell from performing any activity for which she has approval, without the FCA’s written consent.

The FCA said in its latest update today that it had taken action because of concerns that Mrs Campbell has not complied with restrictions imposed on the firm on 9 February 2023 or adhered to the terms of the firm’s First Supervisory Notice published on 10 February.

The sole current director of the firm is Mrs Campbell and she holds the SMF3 Executive Director, SMF16 Compliance Oversight and SMF17 Money Laundering Reporting Officer positions at the firm.

Mrs Campbell has the right to make written or oral representations to the FCA and to appeal to the Upper Tribunal.

Other restrictions placed on the firm in February were an instruction to write to all clients and any platforms holding client investments, retain all books and records and not, without the prior written consent of the authority, to dispose of, transfer, deal or sell assets.

In February the FCA said it had, “very serious concerns about the conduct” of the firm and said it believed that the firm’s sole director may have misappropriated £1.5m of a client’s funds and failed to repay the client’s funds as promised.

It's the second time recently that the FCA has seriously restricted an IFA firm after Nexus Independent Financial Advisers and Nexus Investment Managers - based in Fareham, Hants – were restricted by the FCA from carrying out regulated activities over client money irregularities totalling more than £2m. It's not believed the two firms are connected.

According to the First Supervisory Notice, in July 2022, a consumer transferred a total of £1.5m to Campbell & Associate’s bank account having accepted the firm’s advice to invest in bonds due to mature in January 2023. The firm does not have permission to hold client funds.

The consumer was told that the funds were to be invested in bonds issued by a bank, however the bank has confirmed that it does not offer such bonds and has no record of any investment having been made.

The regulator said that analysis of the firm’s bank statements shows that, contrary to what the consumer had been told, the funds were not invested in any kind of investment. In fact, the statements appear to show that between July 2022 and January 2023, the consumer’s funds were transferred to the personal accounts of the firm’s director or otherwise used to purchase a property for the firm’s director to live in.