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IFA fined 60k over pension unlocking

FSA rules that TV ads and promotions failed to describe risk adequately

The FSA has fined a Maidstone IFA 60,000 for approving misleading financial promotions and related control breaches involving pension unlocking.

Kings IFA has been punished for promotions issued by an unregulated firm Regal Partners Ltd, which acted as an introducer for Kings. The promotions concerned pension unlocking.

The FSA says the promotions, which mainly took the form of TV advertisements, direct mailings, and brochures, failed to fairly and adequately describe the risks associated with pension unlocking. They also included misleading claims that pension unlocking amounted to making the most of a customer’s pension assets.

The FSA says the brochures also failed to include an adequate description of the nature of the service and the commitment required and lacked balance by unduly focusing on the benefits of pension unlocking.

Kings has agreed to appoint an independent third party to review its procedures for approving and monitoring financial promotions and to carry out any action arising out of the review. It has also appointed a full time compliance officer. The regulator says the fine would have been higher if the firm had not agreed to this action.

Director of retail themes Vernon Everitt says: “Firms must have adequate systems and controls to ensure financial promotions are clear, fair and not misleading, whether they issue them themselves or through another firm.

“Potential customers must be able to discern the key risks of an investment as well as its benefits. The FSA considers that the risks and downsides of pension unlocking mean that it is likely to be suitable in only a very limited number of circumstances and unusually as a last resort.”


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