Park Row and its advisers failed to ensure sales were suitable and provide evidence of suitability when advising on pensions, investments, bonds, mortgages, structured products and annuities.
In its final notice, the FSA says between January 2007 and January 2009, Park Row failed to ensure its systems and controls were adequate to manage the risk of the business and ensure suitability of advice through compliance checks.
During this period, the FSA informed Park Row it did not have sufficient controls to ensure that customer files demonstrated the suitability of sales and advice.
This included pension advice, advisers providing advice when not authorised and the risk of commission influencing the selection of products.
Park Row received several reports highlighting concerns relating to advice given and the quality of compliance controls. The firm identified instances when advisers gave advice when they did not have the required FSA permissions but did not take adequate steps to assess if this was a systemic issue.
Senior management sent an email to advisers in June 2008, stating there was evidence of advisers seeking higher-commission pension plans.
The FSA says the email made it clear this was wholly unacceptable but the firm did not conduct any further work to determine if there may have been other instances of commission bias.
Park Row undertook compliance audits of pension advice in October 2007 which found there was potentially unsuitable advice given for pension transfers while the vast majority of Sipp recommendations failed to demonstrate the customer would use the product facilities. No further work was completed at the time to consider if unsuitable advice may have occurred elsewhere.
A wider review of the firm’s pension advice is being conducted following the results of another external review, which concluded that, of 94 pension cases, 26 per cent were unsuitable.