The FSA has levied fines totaling £49,000 on a Derbyshire-based financial advice firm, Sett Valley Insurance Services, and its two partners for failures in its sales and advice processes.
The failings at Sett Valley were initially identified during an FSA visit focused on the fair treatment of customers, as part of its assessment programme for small firms.
The subsequent FSA investigation identified a number of problems with the firm’s sales and advice processes, including a failure to record sufficient information about customers’ personal and financial circumstances to ensure the suitability of any advice they gave, and a failure to communicate with them in a way that was clear, fair and not misleading.
The FSA found both Sett Valley partners Leslie Lugsden and John Hargreaves were responsible for the failings and were each fined £10,500 for breaching the FSA’s rules. Sett Valley was fined £28,000 for the breaches.
Sett Valley must appoint an external compliance consultant to conduct a phased past business review of products sold and compensate any customers who may have suffered loss.
FSA director of enforcement and financial crime Margaret Cole says: “It is unacceptable for a firm operating in this industry not to comply with the FSA’s principles and rules. The partners of Sett Valley failed to control their business effectively and exposed their customers to the risk of receiving unsuitable advice.
“The fine levied on Sett Valley reflects the seriousness of the failings found at the firm while the fines imposed on the partners demonstrate the importance we place on senior management discharging their responsibilities effectively. Had they not agreed to settle this enforcement action at an early stage, the fines would have totaled £70,000.”