The FCA has banned and fined former Financial Group compliance director Stephen Bell £33,800 for “systemic weaknesses” in the firm’s systems and controls.
It comes after the regulator censured networks Financial Ltd and Investments Ltd, two subsidiaries of the group, in July.
Between 20 August 2008 and 16 January 2013, Bell was responsible for compliance systems and controls at the firms.
The FCA found that Bell designed and implemented the firms’ systems and controls and was therefore knowingly concerned in the networks’ rule breaches.
The regulator banned the networks from recruiting new ARs and individual advisers for four and a half months. It found the firms failed to ensure their advisers were adequately supervised and controlled to minimise the risk of misselling and the provision of unsuitable advice to consumers.
FCA acting director of enforcement and market oversight Georgina Philippou says: “This action shows that a compliance director of a network has an important role in terms of ensuring that systems and controls across the network are focussed on minimising the risk of misselling and the provision of unsuitable advice to consumers.
“We view Bell’s failings as particularly serious because he had been put on notice of the need for significant improvements in the firms’ systems and controls and compliance. The network model is undermined if the senior managers of the principle firm do not carry out their responsibilities. “
Bell agreed to settle at an early stage of the investigation and therefore qualified for a 30 per cent discount. Without the discount the FCA would have fined him £48,389.
In 2010 Financial Ltd director Charles Palmer was fined £49,000 for management failings which resulted in poor compliance monitoring on pension switching advice.
In June, the network’s accounts revealed it was under investigation by the FCA over pension transfers.
At its peak, the network was responsible for 400 ARs and 500 individual advisers, who gave advice to over 60,000 customers, including in relation to unregulated collective investment schemes, pension switching and occupational pension transfers.
The group was referred to the FCA’s enforcement division following a risk assessment in May 2012 and the FSA’s thematic review of Ucis sales.