Theft is theft – however and whoever.

cattle thief

cattle thieves



I have been reading about Messrs Grey and Kelly on the FCA’s website. These two advisers systematically pillaged client accounts;  the FCA has found that Mr Kelly

Kelly scam

what is more

Kelly 2

Clearly these guys were up to no good and no more deserved being called adviser than a cattle thief.

But what they did does not seem to be a lot different than many others in the 16 layers of intermediation between us and our money.

  1. They charged too much
  2. They disguised the charge

Where were the product providers in this?

What appears to have happened was that the product providers were happy to release  money from the client accounts into Grey and Kelly’s bank account. They would argue that they sanction payments (at their discretion) to custodians, lawyers, auditors and all manner of other intermediaries as part of business as usual.

Kelly and Grey only differed in that they were the client facing part of the value chain and therefore the people directly regulated by the FCA. It is the duty of product providers (asset managers) to act in the interests of the fund, that means keeping fees to all these intermediaries to a minimum. If these fees were so high, why were the Product Providers called to account by the FCA?


The capacity of asset managers to pay advisers , (see list above) from the assets of the fund is usually written into the terms of business you sign when you make an investment, or in the case of Kelly and Grey, when your adviser makes an investment on your behalf. The permissions are technically available to be seen because lawyers are able to keep their clients “technically” compliant.

We as consumers trust our asset managers to act in our interests (known as the fiduciary duty) and that means the asset managers keep a proper distance between advisers and call time on what they see as shady practice. On this basis, the City has worked for hundreds of years.

The assumption has always been that were a customer to ask to see the books, the asset manager would be proud to show the fiduciary care being taken on their customer’s behalves.

But the asset managers are now telling us that it would be impossible to fully disclose all these “hidden” costs and charges. They say this because to do so would take too long, cost too much and amount to nothing.

Transparency in all things

Kelly and Grey were found guilty  by the FCA of not disclosing their charges and charging too much (they appear to have forged some documents as well). They will now face criminal charges – presumably for theft.

Meanwhile, senior employees of banks and asset managers walk free having stolen money from client accounts through all manner of illegal activities for personal gain. Their behaviour is different only from Grey and Kelly’s in that the victims of their crimes are institutional and the FCA cannot identify them.

But because you ripped off the Post Office or Sainsbury’s pension scheme rather than some hapless SIPP customers, does not mean that individuals did not suffer. These pension deficits are not just because of rip-off charges but costs and charges have to be paid by someone out of something.

Even when these costs and charges are being paid by Trustees and ultimately large employers, they are being paid out of a pot of money dedicated for the benefit of employees.

These are not victimless crimes

It is easy to have a go at Kelly and Grey, they are small fry. It is not so easy to have a go at the large commercial banks, the trading houses, the lawyers, auditors and the investment consultants, all of whom take money our of our funds without telling us how much and often at rates that make my eyes water.

When you call them, they summon you to their offices – sometimes to their lawyers offices- to intimidate you. I was contacted by State Street a few weeks ago who wanted to discuss things I have said on this blog about them. The meeting hasn’t happened because the person who wanted to meet me had to go to the States- in the meantime I am left hanging…

These large financial entities think they can behave as they like with our money, much as Kelly and Grey thought they could. The only differences I can see between the behaviour of Kelly and Grey and these institutions, are down to scale



Addendum; that FCA press release

press release


The Financial Conduct Authority has banned Mark Kelly and Patrick Gray from working in the financial services industry on the basis that they lack integrity.

Mr Kelly provided financial services to UK customers under the name PCD Wealth and Pensions Management (PCD) and Mr Gray was one of his advisers. Between 2008 and 2010 PCD arranged for over 350 customers to be advised and invested nearly £24 million of customers’ funds in potentially unsuitable investments. PCD also failed to declare to customers the fees it was receiving from a number of these investments.

Mark Steward, director of enforcement and market oversight at the FCA said:

“These two individuals misused pension funds, endangering the retirement incomes of hundreds of people. While further investigations continue, the FCA considers it necessary to prohibit them to help protect consumers.”

Between August 2008 and July 2010 Mr Kelly invested customers’ pension funds in risky investments without customers’ knowledge or consent. The process was designed to prevent customers from discovering where their funds had been invested and without any regard to the suitability of the investments for the customers.

Mr Kelly also received some money from product providers taken directly out of customers’ investments, without their knowledge. He arranged for this to be paid directly into a bank account in his name.

Mr Gray provided investment advice to at least five customers in the knowledge that he had no qualifications or training to do so.  In one case he gave unsuitable advice to a customer to invest in an unregulated collective investment scheme (UCIS).

Mr Gray also recklessly provided customers with misleading information in relation to costs and charges and arranged for customers to sign incomplete investment forms despite being aware of the risk that fees could later be added to the forms (and taken from customers’ funds) without their knowledge.

In addition Mr Gray gave customers pension reports containing false and misleading assurances that they would receive advice on their investments even though, from October 2009, Mr Gray knew that funds were being invested without their consent or knowledge. He also misled the FCA in a compelled interview.

The FCA cannot fine either individual because they were not approved persons at the time of the misconduct. The FCA understands that further investigations are continuing.

Notes for editors

  1. The Final Notice for Mark Kelly
  2. The Final Notice for Patrick Gray
  3. On 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA)
  4. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers
  5. Find out more information about the FCA

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , , , , , , . Bookmark the permalink.

Leave a Reply