Britain's Financial Conduct Authority (FCA) said it has fined a wealth management unit of US bank JPMorgan Chase £3.08 million (€3.59 million) for being unable to show it was giving clients the right advice.

The FCA said today that the failings were not corrected until the watchdog brought them to the bank’s attention in the course of its wider review of wealth management firms in Britain.

“No matter who they are, customers of wealth managers should be able to expect the firm to keep complete, up to date client records so that they can give the right advice,” the FCA’s director of enforcement, Tracey McDermott, said in a statement.

“In this case the firm did not have complete records, nor did its management have the information they needed to recognize this,” she said.

The FCA said the failings persisted over two years, exposing customers to the risk that they would be given the wrong advice and inappropriate investments though no actual harm to customers has been identified to date.

After the failings were pointed out the bank took “prompt action” to improve its systems and undertake a significant overhaul of how it assesses if investments are suitable for customers, the watchdog said.

An independent review of 25 customers found “significant gaps” in the information the bank had on 22 of them, such as how much risk the customer wanted to take on.

JPMorgan, whose fine was cut by 30 per cent due to an early stage settlement, said it has fully cooperated with the FCA and has enhanced its procedures to ensure they comply with required regulations.

The FCA is due to publish findings shortly from its review of the wealth management sector in general.

JPMorgan’s wealth management arm offers loans, mortgages and porfolio investment services to clients with $25 million or more to invest, many of whom were working in the financial services industry when the failings took place, the FCA said.

Reuters