Aberdeen fined £7m for putting £650m of investors' money at risk The Financial Conduct Authority (FCA) has fined two Aberdeen subsidiaries, Aberdeen Asset Managers and Aberdeen Fund Management, £7,192,500 for not sufficiently protecting client money with third party banks between September 2008 and August 2011. Almost £700m of investors' money was put at risk. Aberdeen is an emerging markets specialist and runs popular funds such as Hugh Young's Aberdeen Asia Pacific. Under FCA client money rules, asset management firms must deposit a certain amount of clients' money with a third party in case the firm falls on hard times and becomes insolvent. Money held must be clearly identified, protected and returned as soon as possible. However, Aberdeen incorrectly determined that the money involved was not subject to FCA rules and failed to obtain the correct documentation from third party banks when setting up the affected accounts. The regulator added that Aberdeen also used inconsistent naming conventions when setting up the accounts, which created uncertainty over the identities of the clients. These failures put £685m of investors' money at risk, the regulator added, as Aberdeen's clients would have been at risk of delays in having their money returned if Aberdeen became insolvent. Tracey McDermott, director of enforcement and financial crime at the FCA, said: "Proper handling of client money is essential in ensuring that markets function effectively. Where they fall short of our standards, firms should expect the FCA to step in and take action to avoid a poor outcome for their clients, and ultimately, consumers. The FCA added that Aberdeen fully cooperated with the FCA's investigation and agreed to settle at an early stage, resulting in the firm receiving a 30pc discount to the fine.