Towergate accumulated a shortfall of £12.6m in its client and insurer money bank accounts which went undetected for a number of years due to systems and control weaknesses.
Towergate has said that it has fully cooperated and worked closely with the FCA throughout the investigation. It also claimed it had settled at the earliest opportunity, resulting in a reduced fine.
John Tiner, chairman at Towergate said: “While this issue is historic, isolated, and had no financial impact on any clients or insurer partners, it does not excuse the fact that the Company failed to live up to the high standards we expect of ourselves at Towergate and we deeply regret it occurred.
“The Company fully accepts the conclusions reached by the FCA, and the Board is pleased that the Regulator has recognised the Company’s transparency and assistance throughout the process. Since identifying the issue, we have made a number of fundamental changes to our governance and control environment.
“The FCA findings allow us to close the matter, and maintain our focus on continuing to build a better business.”
The FCA also fined former Towergate client money officer Timothy Philip £60,000 and banned him from having direct responsibility for client and insurer money.
Mark Steward, director of enforcement and market oversight at the FCA said: “We have issued repeated warnings to the industry on the importance of complying with client money rules which are designed to ensure that client money is adequately protected in the event of a firm failing. There can be no excuses given these warnings and the stakes involved. In addition, the firm’s failings placed insurer money at risk of loss.
“Senior management are ultimately responsible for ensuring that firms are following our rules and it is very clear that Mr Philip failed in that regard, falling well below the standards we require.”