The FSA has fined two directors and one managing director for failures over the promotion of unregulated collective investment schemes and pension switching advice.
Anthony Smith and Timothy Langman from Milton Keynes-based firm Perspective Financial Management have been fined £16,000 and £10,500 respectively, and have been banned from any senior management role in relation to Ucis and from advising on Ucis.
The FSA also fined PFM £49,000 in February for shortcomings in the way that it monitored pension switching advice.
The regulator found that Smith, who was responsible for compliance, failed to put in place adequate systems and controls to ensure the suitability of Ucis and pension switching advice.
Smith also failed to ensure its systems and controls and procedures were reviewed and updated after concerns by an external compliance consultant, failed to monitor the compliance function delegated to a manager, and failed to take steps to sufficiently understand the FSA’s requirements around the promotion of Ucis.
The FSA also found that Langman, who was responsible for training and competence, failed to adequately address concerns by two sets of compliance consultants about the competency of two of the firm’s advisers. Langman also failed to take steps to ensure that he and the advisers for whose training he was responsible understood the regulatory requirements around Ucis.
Separately the FSA has also fined Specialist managing director Ian Jones £16,000 and banned him from any senior management role in relation to Ucis. He has also been banned from advising on Ucis.
Specialist was fined £35,000 in April for failing to assess whether customers were eligible to receive Ucis promotions and for failing to ensure customers were given suitable advice to invest in them.
The firm promoted Ucis to 101 retail customers in a way that breached regulatory rules. In nearly half of the 20 files reviewed, the advice given to customers was found to be unsuitable.
The FSA says its sees Jones’ failings as particularly serious because of the number of people affected and the high proportion of unsuitable sales. However it says it is encouraged by Jones’ follow-up actions which have seen him improve sales processes and compliance arrangements, He has replaced compliance consultants, conducted a past business review, and agreed to contact customers with a view to paying redress to any who have suffered detriment. Jones has also stopped promoting or advising on Ucis.
FSA head of retail enforcement Tom Spender says: “These three cases are the latest in a series of sanctions we have imposed for failing to understand the regulatory restrictions around Ucis, and making unsuitable recommendations to customers. Both firms have already been punished but as we saw serious failings in the actions of the directors it is only appropriate that they are punished as well.
“Ucis are rarely suitable for retail investors and we expect firms to know this. As such we take a dim view of failing to know how to promote or give suitable advice around the sales of complex investments.”