UK: FSA bans unauthorised financial adviser.

The Financial Services Authority banned a Yorkshire Financial Adviser from working in the financial services industry after it learned of his unauthorised activities. Kevin Allsop of Wakefield, West Yorkshire, ran a business in which he

- bought and sold second-hand endowment policies when he was not authorised to do so

- without the necessary authorisation, gave investment advice on second-hand endowments and arranged for investors to buy and sell second-hand endowments.

-he misled the FSA by providing false information.

-he held clients?money in connection with his unauthorised activities and opened client accounts, in some cases without their knowledge.

Allsop ran two companies, Allsop Financial Services Ltd (AFS) and Allsop Mortgage Services Ltd (AMS).

For a period, Allsop Financial Services Ltd (formerly Kevin Allsop Associates and Kevin Allsop Associated Ltd) was exempt from the need to be authorised in respect of advising on and arranging deals in investments only. If he undertook activity outside those narrow areas, which were covered by his status as an appointed representative of a succession of companies, then it was unauthorised. AMS was never authorised or exempt. In any event, neither Allsop nor any of his companies have been authorised or exempt since August 1988 and since that date all investment business conducted by him or his companies was unauthorised investment business.

Unauthorised investment business is a criminal offence under the Financial Services and Markets Act 2000. It was also a criminal offence under the Financial Services Act which applied before 1 December 2001.

The FSA said that Allsop repeatedly denied unauthorised activity, which was untrue, and that he twice provided incomplete lists of the transactions he had been involved in.

Second hand endowment policies are also known as Traded Endowment Policies (EPs?. TEPs are endowment policies which the original policy holder does not wish to continue and which he chooses to sell to an investor, usually via a TEP market maker (a firm which deals in the buying and selling of TEPs), rather than surrender to the insurance company or make paid up (i.e. cease further premium payments) and are regulated products. The FSA is concerned that not just about the regulatory aspects but also about the reputation of the industry: Andrew Proctor, Director of Enforcement at the FSA said "ot only is Mr Allsop himself a risk to investors but this sort of behaviour gives the industry as a whole a bad name. Regulated firms and members of the public can help us keep the industry clean by alerting us to dubious activities such as this.?Proctor claims that "Allsop's clients were overcharged for the products they bought which means that they will get a lower return on these investments and could even make a loss."