Wealth management firm Ashcourt Rowan has been hit with a £412,000 fine by the FSA over investment suitability failures relating to its Savoy Investment Management business.
The penalty followed a section 166, or skilled persons report, ordered by the FSA into Savoy as part the regulator’s thematic review into wealth management firms.
Ashcourt Rowan was previously asked to carry out an s166 report in 2009, but failed to implement all the changes required.
Ashcourt Rowan group chief executive Jonathan Polin says: “This is clearly a significant penalty but we cannot dispute Savoy historically breached a number of regulatory rules.
“Savoy is the first firm to be penalised for this but it is in my view highly likely that others will follow.”
The FSA found 23 per cent of the 52 files reviewed showed a high risk of unsuitability.
Following the fine, asset management chief executive Christopher Jeffreys has stepped down from the role but will remain at the firm as investment manager. Polin will become interim asset management chief executive until a replacement is found. Group head of compliance Mark Smith has resigned.
Ashcourt Rowan has posted a pre-tax loss of £1.2m for the six months to the end of September, compared with a £1.3m pre-tax loss for the same period last year.
Attain Wealth Management managing director Gordon Crothers says: “Ashcourt Rowan dug its own grave. It was told three years ago about shortcomings which were not addressed. If the FSA tells you to do something, you do it.”