Bristol-based Kilminster was found to have not treated its customers fairly by not handling complaints in good time.
The FSA also said it did not monitor its staff sufficiently or keep appropriate training and competence records.
Kilminster also failed to implement appropriate procedures to co-operate with the Financial Ombudsman Service. The FOS referred Kilminster to the FSA twice for failures to pay awards promptly and the FSA had to write to Kilminster about complying with two further ombudsman awards which Kilminster had failed to pay promptly.
Kilminster has now complied with both awards and paid both complainants.
The FSA viewed the failings as even more serious due to Kilminster’s poor regulatory history. In April 2000, the Personal Investment Authority issued a formal warning to Kilminster about its selling practices, training and competence arrangements, compliance procedures and recruitment practices which resulted in remedial action.
The PIA also raised further concerns about record keeping, training and competence arrangements and compliance procedures in May 2001 which led to additional remedial action.
Kilminster qualified for a 30 per cent discount under the executive settlement procedures for settling early, otherwise the fine would have been £60,000.
FSA director of enforcement Margaret Cole says: “Kilminster did not implement systems to ensure that its customers were treated fairly and we found a number of failings which contributed to poor quality service. All firms should take regulation and their regulatory responsibilities seriously. We have been very clear that firms are accountable for ensuring this is done and that appropriate systems are both implemented and maintained.
“As shown in this case, firms must take action in a timely manner whether it relates to an FSA or ombudsman action. We also take any previous regulatory action that may have been taken against a firm into account when looking at a case as persistent breaches and a slow response are unacceptable.”