David M Aaron (Personal Fin-ancial Planners) has become the first IFA firm to be banned for misselling.
It has been struck off by the FSA for widespread misselling of precipice bonds between January 1998 and June 2003.
An FSA probe revealed that the company issued misleading ads and financial promotions which downplayed the risk of bonds and contained unsuitable recommendations for products.
The regulator found that the firm's records were inadequate, particularly on sales meetings and sales records, and staff failed to observe FSA compliance regulations.
David Aaron founded the IFA firm in 1971 and it had a mailing list of 160,000 people.
Between January 1998 and June 2003, the company sold more than 53,000 regulated products, of which 14,995 were structured. The FSA believes that at least 7,900 of these products were precipice bonds.
The investigation into the firm started in March 2003 as part of the FSA's industrywide thematic review of the sale of precipice bonds. A month later, the regulator told the firm that it had failed to allay its fears over the sales of the bonds and an investigation started.
FSA director of enforcement Andrew Procter says: 'This is one of the most serious cases of misselling that the FSA has investigated and it is the first time that the FSA has banned a firm for misselling. The problems within David M Aaron were systemic and went to the very heart of the way the firm operated.”