Isle of Man firm acquires advice company client book – International Adviser

MAC Financial, part of the MAC Group, has bought the clients of Island Financial Solutions (IFS), an independent financial adviser business based in Douglas.

All IFS employees have been offered contracts with MAC Financial with the exception of its co-founders and directors.

The deal is expected to complete by 1 November 2020 and the financial terms were not disclosed.

Further acquisitions

Jon McGowan, MAC Group chief executive, said: “MAC is constantly looking at strategic opportunities to grow our successful financial services business.

“We have a number of discussions underway regarding further acquisitions and would always like to hear from both IFAs and general insurance brokers who may wish to retire or exit the industry.

“We can offer an attractive package to work with business owners to unlock the value they have built up in their companies.”

Regulatory action

This deal comes as the Isle of Man Financial Services Authority (IoMFSA) issued a discretionary penalty of £89,994 ($117,820, €89,499) to IFS on 28 September for regulatory failings, in relation to its financial advice offering.

The penalty was discounted by 30% to £62,996 because IFS co-operated with the investigation, which called into question “IFS’ fitness and propriety”.

Also, on 22 October, the IoMFSA issued a statement about IFS financial adviser Stephen Cryer.

The watchdog investigated Cryer, who was a “permitted person” and held a licence to carry out regulated activities.

The investigation “identified a number of regulatory failings in relation to the permitted person’s provision of financial advice to its customers”.

Company findings

The watchdog said that the firm, as a standard practice for UK defined benefit pension transfers, “disaggregated the advisory process, treating the pension transfer process as ‘execution only’”.

Although the clients were provided with Financial Conduct Authority-authorised advice regarding the transfer, this was a “false partition of the true nature of the transaction”.

“These practices were contrary to regulatory requirements and failed to ensure the suitability of the overall advice provided to its clients,” said the IoMFSA.

IFS “mis-used its own group pension scheme, regular contributions only, with such activity being contrary to the terms agreed with the product provider, and without ensuring that its clients were fully informed of the product into which they were exposed”.

The firm also had an “ineffective compliance regime” that failed to prevent the backdating and pre-signing of documents.

It also failed to ensure that its employees on every occasion adequately disclosed its commission or fee arrangements to clients.

Despite IFS’ shortcomings, customers interviewed by the IoMFSA were “content with the suitability” of the pension and investment products recommended to them.

Stephen Cryer

Following the investigation, the IoMFSA banned Cryer from “performing any function in relation to any regulated activity carried on, or proposed to be carried on, by a permitted person”.

He has also been prohibited from performing any function in relation to any activity carried on, or proposed to be carried on, by an authorised insurer, a registered insurance manager or a registered insurance intermediary insurance business, an insurance manager or an insurance intermediary.

Cryer has worked in the Isle of Man for more than 20 years, and was previously at Aviva Life (Norwich Union), where he was responsible for the development of all local Aviva Life business.

Misleading statements

The IoMFSA found that Cryer, on at least one occasion, “intentionally removed details regarding commission arrangements from communications with a client” and “failed to make them aware of all relevant commission arrangements”.

He also on at least one occasion, “applied a client’s signature on their behalf to a file without instruction”.

Cryer “incorrectly and deliberately recorded files as ‘execution only’ whilst providing ‘limited advice’” and “made statements which he knew to be false or misleading”.

The IoMFSA added that Cryer “facilitated a potentially unauthorised member payment through the permitted person receiving an advisor charging fee” and shared “90% of that fee with the client”.


Cryer has “engaged positively in concluding the investigation and accepting this prohibition”, the IoMFSA said.

IFS cooperated “fully and engaged positively” and its directors “have taken responsibility for the failures” of the firm, it added.

MAC Group told International Adviser that it is fully aware of the IoMFSA’s regulatory investigations and this is why the company is acquiring the client book of the business, so it can give a good outcome to the customers.


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