View more on these topics

B&B hit with bond misselling fine after failing to heed FSA warnings

The FSA has fined Bradford & Bingley £650,000 for widespread misselling of with-profits and precipice bonds.

B&B has also agreed to pay £6m in compensation to 6,800 customers affected by the misselling which took place between January 2001 and December 2002.

The FSA says B&B did not make suitable recommendations to customers, did not maintain adequate records of sales and did not have in place adequate systems and controls to prevent and ultimately address these failures. The firm’s misselling of precipice and with-profits bonds was made more serious because it was warned on a number of occasions from 1998 onwards that there were significant issues with the quality of its customer records but failed to act.

B&B says it has now conducted a thorough investigation into the circumstances surrounding this period of misselling and has retrained its advisers and implemented new systems and controls in relation to its sales and checking processes.

Syndaxi Financial Planning director Robert Reid believes this judgment could be the thin end of the wedge with regard to misselling of with profits bonds. He says direct salesforces are more likely to be hit by the regulator than IFAs.

FSA director of enforcement Andrew Procter says: “During the period in question, B&B was the largest IFA in the UK and its brand had widespread public recognition which raised among its customers the expectation that the service it provided to them would be of a high standard.

“However, B&B’s advisers sold precipice and with-profits bonds without having in place adequate systems and controls to ensure the products sold were suitable. The FSA has repeatedly stressed to firms through supervision and guidance the importance of keeping adequate records of sales but B&B failed to do so in these cases.”

Recommended

FSA deputy Boyd gets OBE

The Queen’s New Year’s honours list awarded decorations to members of the financial services community, including FSA deputy chair Stewart Boyd and Co-operative Bank Financial Services former chief-executive Mervyn Kay Pedelty. Boyd receives an OBE for services to the finance sector while Pedelty receives a knighthood for services to business and charity.

Tom Baigrie on protection

By the time you read my next column, the unregulated protection market will be no more. No longer will the future of providers and distributors be left to market forces and their own efforts. >From January 15, the FSA will be the most important factor in whether a protection distributor survives or goes down and […]

Buckles acquires Wrexham adviser

Welsh IFA national Buckles Investment Services has bought Wrexham-based financial adviser Phillip Ridgway. Founder Philip Ridgway is leaving the industry and Buckles will take over the 300-strong client base. Buckles chief executive Nigel Speirs says the deal consolidates the group’s position as the biggest independent adviser in the North-west.

The Perils of Passive Investing

The era of loose monetary policy created an environment that rewarded passive investors in the US. However, with the US raising interest rates for the first time since 2006, Felix Wintle explains why he believes active investing will be more important than ever. In the video Felix discusses: The rising cost of capital and its […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com