Yesterday the FSA announced it had fined the firm £1.12m for serious failings in its pension transfer, pension annuity and income withdrawal business that lead to misselling.
Samuel says: “It is clear that the 2005 move, which brought the company together in its current form, was mismanaged by the individuals involved including the regulator. Many of the compliance problems discussed are as old as the industry itself and could have been identified relatively easily in advance.”
Samuel says the regulator has been unhappy about the systems and controls of the business since November 2005, but significant problems that were identified were not fixed until as late as January this year.
Samuel says: “There were major structural concerns in the way in which this firm handled compliance as late as November 2007. The regulator simply dropped the ball with a major nationwide advisory business that was never quite right.”
Samuel adds it is “curious” that the final notice states that the firm has no previous disciplinary record because the business is the result of a number of mergers.
He says: “Chase de Vere Financial Solutions plc received a £165,000 fine in December 2003 for bad financial promotions. DP 07/4 refers to AWD acquiring “Chase de Vere”. If the “Chase de Vere” fined in 2003 is not the same company as the one now involved, the FSA should say so, bearing in mind the distinctive nature of the name.
“AWD plc also incorporates Read Independent Financial Advisers Ltd, according to the AWD website. That company was fined £150,000 for pensions unlocking in 2004. Where an entity purchases a firm with a prior conviction, it must be taken into account when considering fines. Otherwise, the idea of previous compliance record becomes a bit of a joke.”