PI excess fears for ex-Park Row IFAs
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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 internal compliance.
IFAs have been advised that if Park Row’s desk-based monitoring team, which undertook compliance checks, originally pre-approved a case and redress is requested by a client, the adviser will not be asked to contribute towards any PI excess. However, if the DBM did not require pre-approval, Park Row is understood to be reserving judgment on whether to pursue advisers for costs.
In February, the FSA censured Park Row for failing to ensure its sales were suitable and estimated customer redress of between £5m and £7.8m for any unsuitable advice. KPMG was commissioned to undertake an independent review of investment advice and some Park Row advisers are understood to be unhappy about the results and have complained to the FSA.
Many of the 240 ex-Park Row advisers have been waiting for reauthorisation since last November and have been unable to service clients since then.
Parent company Royal Liver says: “We can confirm that each case will be dealt with on its own merits and therefore there may be circumstances where advisers will not be asked to contribute to costs.”
Newlyn Financial Management director Richard Costain recently had his reauthorisation application rejected by the FSA. He says: “As a Certified Financial Planner with nearly 30 years industry experience it is worrying that the FSA can bring my business and others to a standstill and potentially destroy it.”
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Readers' comments (13)
IFA Defence Union | 21 May 2010 9:13 am
No they won't, they should come to us for advice.
They should also come to us for advice over any failure to be re-authorised elsewhere.
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Ian | 21 May 2010 9:32 am
It is a disgrace not allowing the ex ParkRow advisors to sell. It could cause severe financial consequences for these advisors. 6 months not being able to sell would cause majority financial problems.
Surely something could or can be done legally to stop this.
Maybe if the staff at the FSA working on the ParkRow case had their wages stopped until it was resolved it might speed it up!!!.
Again FSA doing what they want.
THEY REALLY DO NOT CARE ABOUT US IFAS DO THEY.
I REALLY DISLIKE THE WAY THEY GO ABOUT THINGS NOW.
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Anonymous | 21 May 2010 9:40 am
As an industry we need action taken to save on these poor people now! if not, how knows who will be next, come on MM raise the game and help sort FSA out
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Pissed Off IFA | 21 May 2010 10:00 am
Someone should deathorised the FSA and see how they like it. Oh, I forgot they are not regulated.
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Ex Park Row | 21 May 2010 10:28 am
FSA didn’t supervise Park Row correctly in the past.
FSA apply a fine that they don’t want paid.
FSA only find one person at fault.
FSA withhold 240 advisors livelihoods.
And the FSA believes it is the best regulator in the world.
What planet are they living on today?
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Anonymous | 21 May 2010 10:42 am
What about Park Row breaking their contract with advisers in not providing a suitable compliance service.DBM was a rudderless ship even when Park Row was fully operational with very few cases in the early days requiring pre approval and now this could potentially come back to bite the advisers.
How can they claim the P.I excess after the way the advisers have been treated so shabbily. If Royal Liver are picking up the tab because Park Row couldn't afford it how can advisers who have been out of work for 6 months be expected to pay up.
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RAPHAEL kOZLOWSKI | 21 May 2010 11:04 am
C'mon cameron and Clegg. Dissolve the FSA and quickly.
Just a reminder Northern Rock followed by Lehman Bros and where was the FSA ? Sitting on their hands as usual. This is a totally trumped up organisation that actually has no humanity in it, does not understand people let alone the industry they're supposed to regulate. And now 240 advisers who can't work. SHAME ON YOU THE FSA.
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Cynical Ex Park Row | 21 May 2010 12:02 pm
Park Row DBM is now swamped with complaints following the FSA censure. Some may be genuine most will be trying their luck. I suspect most of these will be processed quicker than they should be to meet the deadlines and reduce the backlog and with the amount Royal Liver has set aside the decision is likely to come down in favour of the complainant without a thought being given to the impact on the adviser. Come on Park Row/Royal Liver you were responsible for this mess, you benefitted from the commissions, you pay up in full!
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tricia campbell | 21 May 2010 12:27 pm
I find it appalling the FSA will not re-autorise the advisers. I worked with Richard Costain for a good number of years, he was a highly respected, fully qualified, fully trust worthy adviser.
How can good advisers not be authorised whilst their clients need advice.
Soneone needs to re-assess the situation fast.
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terry | 21 May 2010 12:52 pm
Utter shambles and thats being polite. The top dogs in the FSA should be taking a pay cut and refunding some of the hundreds of thousands they are paid in salaries and bonuses back to IFA,s. They have not done their job properly and are in their own words"not fit for purpose"
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