FCA’s hands tied as firm plagiarises wealth managers to target pensioners

Clone firm falsely claims to have won ‘clean sweep’ at Portfolio Adviser awards

A website targeting pensioners with material pilfered from wealth and asset managers remains online weeks after it was first brought to the Financial Conduct Authority’s attention because the regulator does not have the authority to bring it down.

The firm copied the name of a registered FCA accountancy firm, Holden & Co, and has used a marketing brochure from Whitechurch Securities, as well as a fund factsheet from Aberdeen Standard Investments.

Whitechurch Securities has told Portfolio Adviser they are shocked to discover their marketing materials have been plagiarised and want to see the operation shut down while the original Holden & Co has faced delays from the FCA taking action over the operation.

False claims of clean sweep at Portfolio Adviser awards

Portfolio Adviser was alerted to the website by a pensioner asking after a company called Holden & Co, which claimed it had won an “an unprecedented clean sweep” at our PA Wealth Manager awards in 2016.

A client servicing executive from Holden & Co who had been emailing the self-described “retired, retail punter” over several weeks asked the retiree to consider the “vast number of awards” the firm had snagged for its expertise in wealth management.

A brochure seen by Portfolio Adviser falsely claimed the clone firm had in 2018 taken home the Platinum Award for Best Cautious Manager at the Portfolio Adviser Wealth Manager Awards. It also touted “an unprecedented clean sweep” at the awards in 2016, winning Platinum trophies across the risk spectrum in the boutique category.

The pensioner, in his 60s, also approached Money Marketing and Citywire Wealth Manager, whose awards were also listed in the marketing brochure. Those publications’ websites also showed no mention of a Holden & Co winning any gongs.

The pensioner recalled being both “quite impressed” and at the same time “highly sceptical” of “all the badges”. “Because, you know, great if you can get them, but you have to be pretty amazing.”

Whitechurch ‘shocked’ by plagiarism

Portfolio Adviser quickly discovered both the badges and the brochure belonged to Whitechurch’s Prestige Investment Management Service brochure available on its website.

All references to Whitechurch Securities had been replaced with Holden & Co in the pilfered brochure with the only difference being the name of the chairman was switched from Kean Seager in the Whitehouse version to CEO Kevin Salcombe in the Holden & Co document. However, Seager’s signature remains in the Holden & Co brochure.

Whitechurch told Portfolio Adviser it was “shocked to find out that our brochureware has been plagiarised”.

The wealth manager’s compliance director Gaynor Neman said: “It is always disappointing to come across the many lengths some people go to in order to rob unsuspecting people of their hard-earned assets.

“Our website and digital brochures are freely available to all legitimate investors and we will investigate additional measures to protect our content.

“However, our main concern is how to protect vulnerable individuals from falling prey to these fraudsters. The FCA clearly has an over-arching responsibility and we hope they will act swiftly in addressing this latest cloning incident.”

Luxury Canary Wharf development

Holden & Co also tried to entice the retired pensioner with a fund factsheet ripped from Aberdeen Standard Investments and a brochure on a luxury Canary Wharf property development, which a representative told him would yield a 10% fixed return over the next two to four years.

All of the text that appears on Holden & Co’s website, including a company overview which describes “the Holden Family” as a growing “team of likeminded individuals” that “invests in people above all else”, has also been pilfered, from another UK-based investment firm which preferred not to be named for this story.

The real Holden & Co.

Apart from its name, the FCA-registered Holden & Co has little else in common with the activities its clone firm purported to offer.

The authorised Holden & Co has deliberately chosen to keep a low profile and does not have a website, but it chiefly undertakes specialist business and accountancy work as opposed to giving investment advice, which makes up substantially less than 50% of its business activities.

Its contact details listed on the FCA’s website are 78 Pall Mall, a similar address to 100 Pall Mall, which is given by the clone firm.

Portfolio Adviser reached out to Edward Holden, the sole ‘active’ individual associated with the firm in the regulator’s database, last Friday. He confirmed his firm does not promote investments to the general public by ‘cold calling’ or any other means.

Holden was already well aware of the existence of the other Holden & Co, having been alerted by a prospective investor several weeks prior. This investor provided Holden with the brochures and marketing documents that had been sent to them by the wealth management firm, which Holden promptly forwarded to the FCA on 29 April.

The FCA has not yet taken action against Holden & Co.

FCA could have done better

The pensioner who originally alerted Portfolio Adviser to the clone firm followed up with the FCA on Friday. He said the representative he was speaking to seemed to be hearing about this issue for the first time, despite the fact the wealth manager had been flagged to the regulator two weeks prior. He was also told there was no record of a Holden & Co being flagged on the FCA’s internal systems.

Mick McAteer, co-director at the Financial Inclusion Centre and former FCA board member, says he is “very disappointed” that the FCA representative who was speaking to the retiree seemed to have no knowledge that a complaint against Holden & Co had been flagged.

“They really ought to have made sure that the systems were talking to each other internally,” he says. “They’ve put a lot of investment into whistleblowing systems and also complaints systems and I’d be very disappointed if that still wasn’t working.”

However, he says he isn’t surprised that the regulator has been slow to respond.

“I wouldn’t be surprised if this single case wasn’t given the same attention as say a massive large-scale fraud involving hundreds of millions of pounds or a big massive insider dealing case,” says McAteer.

“The FCA has to deal with one of the most complex and largest financial sectors in the world and, to be frank, they will prioritise large scale cases and cases where there are multiple consumers affected.”

Regulator lacks powers to deal with clone website

The FCA does not have the power to take a website down even in cases where it suspects fraudulent activity though it has asked the government to review this.

Currently the City watchdog relies on the official registrars to cooperate with its requests and Portfolio Adviser understands it is seeking to work more closely with tech and internet service providers to encourage them to block scam websites promptly.

The regulator said in a statement to Portfolio Adviser: “The FCA published over 522 warnings about potentially fraudulent firms in this financial year. We analyse and assess all reports of unauthorised business received from consumers, firms, and other sources. Before we publish a warning about a cloned firm, we must be certain that the information we publish is accurate. We continue to encourage customers to deal with FCA-authorised firms. If they are unsure they should check on our register (register.fca.org.uk) and contact the firm on the details provided to verify that they are dealing with the regulated firm.”

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