Last year, Park Row chief executive Peter Sprung was fined £49,000 and banned for five years for failing to ensure his advisers were providing suitable investment advice.
It therefore appears very strange that last week’s £7.7m FSA fine against Barclays was not accompanied by punishments for any of the bank’s senior staff who supervised advice failings which caused up to £60m of consumer detriment.
The FSA says Sprung did not ensure advisers properly evidenced the suitability of sales, offered suitable advice or had adequate systems and controls, creating up to £7.8m of consumer losses.
In levying Barclays’ fine, for advice failings first exposed by Money Marketing in April 2009, the FSA revealed widespread failures over client suitability, staff training, customer literature and sales monitoring procedures. The regulator says Barclays was aware of the problems in June 2008 but did not take appropriate action.
If the FSA felt it right to personally fine and ban Sprung, why has no one in the senior management at Barclays been named and shamed or faced a fine or ban for similar supervisory failings?
Last year, the Which? Future of Banking commission concluded that senior management at the banks should take on more responsibility for failures resulting from the sales practices of staff working under them.
It is hard to see how the major high-street banks will clean up their advice processes unless those in charge believe they will be held accountable for that advice when it goes wrong.
The Sprung/Barclays comparison suggests again that IFAs are not being paranoid in believing there is an unlevel regulatory playing field between themselves and the banks.
Will any senior manager at Barclays face a similar punishment to the one handed out to Sprung? If the answer is no, the FSA should explain why.