The FCA says 80 per cent of Financial Limited’s Ucis customers may have received unsuitable advice after finding “systemic weaknesses” in the network’s systems and controls.
The regulator has today banned Financial Ltd and Investments Ltd from recruiting new ARs and individual advisers for four and a half months.
Were it not for the firms’ financial position, the FCA would have imposed a £12.6m fine on Financial Ltd and a £621,583 on Investments Ltd.
The FCA has ordered the firms to conduct past business reviews in relation to pension-switching recommendations and promotion and sale of Ucis, which may result in redress being paid to consumers.
The regulator says between 20 August 2008 and 30 April 2013, Financial Ltd sold 322 Ucis funds to 252 customers.
Of these customers, the regulator says 80 per cent may not have been eligible for promotion of Ucis funds and/or may not have received suitable advice.
At its peak, Financial Ltd was responsible for 400 ARs and 500 individual advisers, who gave advice to over 60,000 customers.
The FCA says all of these customers were exposed to a “significant risk” of unsuitable advice.
Investments Ltd advised 1,407 customers over the relevant period. It undertook 24 sales of Ucis funds to 22 customers.
In response to an FSA thematic review on Ucis, in August 2012 Financial Ltd banned its ARs and advisers from selling Ucis.
However, following discussions with the regulator this ban was lifted by the network in August 2013, to allow it to provide independent advice under the RDR.