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First censure from FSA after small firms’ probe

The FSA has imposed a public censure on Cheshire Life & Pensions for failing to ensure its advice on income-drawdown products was suitable.

The action is the FSA’s first enforcement case arising from its small firms’ assessment programme on treating customers fairly. The regulator found that Cheshire L&P had failed to gather or record adequate information about customers’ personal and financial circumstances to support its assess- ment of suitability.

It also found that the firm had failed to adequately exp-lain the reasons for its recommendations, including adeq- uate risk warnings in suitability reports about the recommended product and under- taking sufficient research.

Director for small firms Lesley Titcomb says: “We will continue to identify firms who fail to treat their customers fairly through our small firms assessment programme and other work and we will take appropriate action. This can and will include enforcement action and sanctions where appropriate.”

The FSA has told Cheshire L&P to write to all its income-drawdown customers, undertake a past business review and use an external compliance specialist to provide ongoing advice and oversight.

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