FSA fines IFA firm £49,000
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The FSA has levied fines totaling £49,000 on a Derbyshire-based financial advice firm, Sett Valley Insurance Services, and its two partners for failures in its sales and advice processes.
The failings at Sett Valley were initially identified during an FSA visit focused on the fair treatment of customers, as part of its assessment programme for small firms.
The subsequent FSA investigation identified a number of problems with the firm’s sales and advice processes, including a failure to record sufficient information about customers’ personal and financial circumstances to ensure the suitability of any advice they gave, and a failure to communicate with them in a way that was clear, fair and not misleading.
The FSA found both Sett Valley partners Leslie Lugsden and John Hargreaves were responsible for the failings and were each fined £10,500 for breaching the FSA’s rules. Sett Valley was fined £28,000 for the breaches.
Sett Valley must appoint an external compliance consultant to conduct a phased past business review of products sold and compensate any customers who may have suffered loss.
FSA director of enforcement and financial crime Margaret Cole says: “It is unacceptable for a firm operating in this industry not to comply with the FSA’s principles and rules. The partners of Sett Valley failed to control their business effectively and exposed their customers to the risk of receiving unsuitable advice.
“The fine levied on Sett Valley reflects the seriousness of the failings found at the firm while the fines imposed on the partners demonstrate the importance we place on senior management discharging their responsibilities effectively. Had they not agreed to settle this enforcement action at an early stage, the fines would have totaled £70,000.”
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Readers' comments (31)
Incompetent Regulators Awards Team | 27 Jan 2010 12:09 pm
Ooooooooooohhhhhhhhhhhhh!!!!!!!............
I'm so scared of the FSA as they are so efficient!
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Philip Meadowcroft | 27 Jan 2010 12:16 pm
Still no news about the failure of the top brass at the FSA to comply with the FSA rules in respect of their expenses.......
I wonder how the FSA's Chairman is managing his expenses in Davos this week.
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Richard Costain | 27 Jan 2010 12:39 pm
Whilst I am not defending the actions of this company's procedures, perhaps Margaret Cole should be looking at how THEY comply with THEIR own rules. It would be nice to think that the Senior Managers that overclaimed hotel expenses will be reimbursing them and have disciplinary action taken against them - I doubt very much that this will happen though.
How am I supposed to control my business effectively when the FSA are still delaying my re-authorisation (without any explanation) following the closure of Park Row on 13th November and not allowing me to advise clients? Perhaps they want to put small IFA's out of business giving all the power to the banks?
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Fungible Cat | 27 Jan 2010 12:52 pm
Yet again our industry is let down by idiotic remarks.
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Anonymous | 27 Jan 2010 1:07 pm
So, if the likes of the banks couldn't produce the mountain of paperwork required to fend off the TCF Harpies would we see a full review of all their sales?
Is it a fact that one bank has been subjected to an FSA 'mystery shopping' exercise? Why is that so?
Balanced? Don't think so.
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Anonymous | 27 Jan 2010 1:07 pm
So, if the likes of the banks couldn't produce the mountain of paperwork required to fend off the TCF Harpies would we see a full review of all their sales?
Is it a fact that one bank has been subjected to an FSA 'mystery shopping' exercise? Why is that so?
Balanced? Don't think so.
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Ron Jones | 27 Jan 2010 1:11 pm
Yet again another small company making headlines, yet the 1 million plus bank complaints filed by consumers have not led to ONE action by the FSA on a well know high street bank.
People wonder why the FSA gets a bad press and why so many people do not respect them and make nasty remarks, it is no wonder at all to me.
Surely the highest number of consumer compliants would lead to the highest number of regulatotory involvement?
Not with this regulator it appears, back to kicking the little man then.
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Francis Stephen Adams | 27 Jan 2010 1:13 pm
Once again, a scary article written by a journalist who should spend a day with an IFA. The bully boys have struck again and I hope that they get what is coming to them later on this year. As for Seth, why do they not stick it right up the bully boys and resign their authorisation, I am sure they can earn more money being unauthorised. Best wishes to the boys at Seth for the future.
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Anonymous | 27 Jan 2010 1:18 pm
I'm unable to comment of the specifics of this case but I would like to see some fines being applied by the FSA to their own FSA staff including main board officials who have exceeded their FSA hotel allowances and then breached their own rules by claiming the excess! Several years ago MM reported on an FSA compliance visit to an IFA. The IFA recorded the time and discovered that again the FSA staff had made false expense claims. I'm afraid Margaret Cole you need to put your own Canary Wharf house in order before you do anything else!
Signed Ann Onymous
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Anonymous | 27 Jan 2010 1:23 pm
Of course with a fine of £49,000 there would have been a judicial type review of the evidence and a right of appeal to the opens courts - NOT! Or do we now live in a police state - YES
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