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18 July 2016

The Financial Conduct Authority (FCA) has cancelled an advice firm’s permissions after its sole director was sentenced to 12 months in prison.

Keith William Smith, who ran Milton Keynes based KWS Wealth Management Limited, was convicted of fraudently taking out a life insurance policy on his dying wife last October.

According to Gloucestershire Live, Smith and his late wife failed to declare that she had been diagnosed with cancer when taking out a £200,000 life insurance policy with Aviva.

During his trial Smith said he was unaware of the cancer diagnosis at the time he signed the forms agreeing the policy with Aviva.

However, a jury at Gloucester Crown Court found him guilty of ‘dishonestly failing to disclose information which he was under a legal duty to disclose’.

Smith was sentenced to 12 months’ imprisonment, suspended for 24 months, and was ordered to pay a £100 victim surcharge.

The FCA asked KWS to cancel its own permissions following his conviction, but the firm declined to do so.

As a result it has published a decision notice against KWS.

Smith told the authority that his failings ‘were the result of extreme, personal circumstances in which he found himself’ and were ‘completely out of character’ after 25 years as an IFA.

‘The FCA has taken into account the mitigating factors surrounding Mr Smith’s criminal offence and acknowledges that Mr Smith’s actions took place against the background of very tragic circumstances,’ the regulator noted.

‘However, Mr Smith was convicted of a dishonesty offence and the judge found that Mr Smith abused his position and his knowledge of the financial services industry by perpetrating the fraud.

‘In the circumstances and given Mr Smith’s close connection to KWS (as the sole director, sole shareholder of shares with voting rights and sole approved person at the firm), KWS has not demonstrated that it conducts and will continue to conduct its business with integrity and in compliance with proper standards.’

By David Petty

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