Park Row's Peter Sprung given £200K payoff
Share
Former Park Row chief executive Peter Sprung was handed a £200,000 severance payment by parent company Royal Liver, following his departure from the firm in January.
In February Sprung, who was CEO of Park Row between January 2007 and January 2009, was fined £49,000 and his FSA approval withdrawn by the regulator after failing to ensure the firm’s sales were suitable. The FSA ordered Park Row to pay customer redress of between £5m and £7.8m for any unsuitable advice.
Company reports for the year ending December 31 reveal that Sprung received a salary of £174,000 as well as over £20,000 employer pension contributions and a £10,000 company car provision. He was also paid over £3,000 in commissions by Park Row Group.
Royal Liver estimates that Park Row closure costs total £15.9m which include redundancy costs and forecast operating losses and customer redress which amounts to £8.3m.
Park Row losses from ordinary activities before redress provisions and closure costs amounted to £8.6m compared to £5.9m a year earlier.
KPMG was commissioned to undertake an independent review of investment advice given by ex-Park Row advisers and some are understood to be unhappy about the results and have complained to the FSA.
Many of the 240 advisers have been waiting for reauthorisation since last November and have been unable to service clients since then.
Last week, Money Marketing reported that ex-Park Row advisers fear they may be pursued for professional indemnity excess payments regarding complaints relating to customer files which were not vetted by the firm’s internal compliance.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page
Readers' comments (12)
Ex Park Row | 24 May 2010 5:12 pm
And to think the honest ex park row advisers still can't work, even after 7, yes seven months.
And how do the FSA justify this? Oh yeah they don't have to. It's just our livings, our families, our businesses.
Just wait for all the complaints to come in from our clients for not servicing them because we are not authorised. They should complain but then who would pay out. Park Row will be closed down in the next month or two so I guess it will just have to be us, the advisors.
How many of us will have the £’000’s of pounds to pay for these claims after so long out of work?
Let’s face it Park Row failed and the FSA failed in regulating them. Now the FSA has band us from looking after our clients then that must be a good reason for a complaint.
Perhaps it would have been easier if the slogan for Park Row was “join us and do a good job and you’ll be out of work for ages” Or “join us mis-sell, make a packet and then leave the company and go somewhere else and the FSA will leave you alone”
Unsuitable or offensive? Report this comment
Anonymous | 24 May 2010 5:35 pm
Barking madness.
Unsuitable or offensive? Report this comment
Julian Stevens | 24 May 2010 5:36 pm
Well, yes, a £200,000 pay off is pretty bad, but bear in mind that it's less than a third of what the FSA gave Clive Briault (with our money) when they booted him out for the chronic failure of the department of which he was in charge to regulate Northern Rock (and probably other such institutions).
So it's all a pretty dirty mess at other peoples' expense and Canary Wharf looks like the dirtiest corner of all.
Will we ever manage to clean up regulation in the UK? If we don't, it won't be for want of trying. The rebellion grows.
Unsuitable or offensive? Report this comment
Baron Bolligrew | 24 May 2010 7:03 pm
Anyone know a decent regulator abroad from where I can passport back to this country?
Unsuitable or offensive? Report this comment
Rob | 24 May 2010 7:04 pm
I always have a look at these responses to articles and it makes me laugh. Often these firms/networks trade on a very frail financial model. Often the tail can 'wag the dog'. Individual advisers realising they are so crucial to the financial existence of a firm they do what they like and expect someone else to pay the price. I've worked with some superb advisers and those that simply want to do what they like with someone else being responsible.
I've had loads of advisers be completely vitriolic against me, because I wouldn't let them pedal unsuitable advice, yet they'd have the utter front to stand back and say I should be controlling it when other advisers try the same thing.
Add into the mix my career was on the line and we have a full house. Everyone wants to pass the buck, but not accept the blame for their incompetency. Compliance is usually about as welcome as the proverbial 'fart in an astronaunt suit', but when the FSA roll up who gets the grief?
I now work for directly authorised firms who take their own risk. The reason I work for these firms is In the past I am utterly sick of firms ignoring me passing on FSA guidance and me getting the blame. Directly authorised firms accept their responsibility.
I do however apologise to any firm/adviser that adheres to the guidance offered by their network/compliance department.
Unsuitable or offensive? Report this comment
Regulator | 25 May 2010 8:42 am
Interesting that the comments so far all seem to blame the FSA. Surely if £8.3 million redress has been paid so far, that tends to indicate there were systematic compliance failings within Park Row and bad sales practices from some of its advisers?
Yes, the FSA should be more pro-active, but the management and the dodgy advisers are the ones at fault in the first place.
Unsuitable or offensive? Report this comment
Anonymous | 25 May 2010 11:08 am
I wonder if regulator feels that there are two sorts of adviser
(1) Dodgy adviser
(2) Dodgy adviser not been caught yet!
Park row made mistakes but hey the FSA are perfect!
Unsuitable or offensive? Report this comment
Ewart Matthias | 25 May 2010 11:36 am
I think the issues here are not as simple as comments may indicate. I think Rob has a point, many, yes many advisers want the easy route and complain like mad when the proverbial hits the fan. We all have a responsibility to do it right.
On the other hand KPMG go in take as long as they like in assessing the situation (paid for by the day!!) and the ex advisors are left to suffer in silence, because no one but no one can question the FSA or KPMG. KPMG as agents of the regulator have carte blanche to take as long as they like and make decisions without question and of course the company pays the bill. Personally I would question the association between the FSA and KPMG in this. Is there a financial consideration to the FSA from KPMG? Just asking!!
As for Peter, I have commented previously in this regard and always found him honest and with the highest integrity. Here he is now away from the Profession I know he loves and has given so much and what he has received is reduced by £49k and tax of course and is not all hard cash and add to this has to last for a minimum of 5 years. I'm sure he will survive but I just wonder how matters would have turned out if theere had been the means to challenge the FSA and KPMG findings in a court of law? Ah yes I forgot the FSA are above the law aren't they?
Unsuitable or offensive? Report this comment
IFA Defence Union | 25 May 2010 11:54 am
Having finally got round to taking a look at this matter it is immediately apparent that very little attention has been paid to the facts of the matter, the FSA has not taken account of the failures of Park Row itself as the authorised firm which was responsible for ensuring that these advisers were competent, it has failed to look at how the agents can be deemed to be "not fit and proper" by reference to an 'independent' audit by KPMG.
We are horrified to see what amounts to blackmail being used to deter these people from appealing the FSA decisions.
We are also concerned that KPMG have written to customers with reference being made to the agent rather than Park Row which is the firm responsible.
We have set up a Googlegroup for these advisers through which support will be provided.
We question whether it is moral to compensate someone for ruining the lives of people who were once within a provider's direct sales firm and were forced into an IFA situation without any compliance support whatsoever. These directors should be banned for life.
The failures of the regulators and Park Row directors are unforgivable.
These advisers need not fear demands for compensation because they were not at fault.
Unsuitable or offensive? Report this comment
Phil Castle | 25 May 2010 12:13 pm
I agree with Ewart and IFADU's comments above.
Unsuitable or offensive? Report this comment