The FSA has fined Charles Palmer, director of IFA network, Financial Ltd, £49,000 for management failings which resulted in poor compliance monitoring on pension switching advice during a period of rapid expansion.
Gloucestershire basedFinancial Ltd has also agreed to carry out a past business review, which may lead to customer redress if it is found that unsuitable advice was given.
During its investigation, the regulator found shortcomings in the way the firm organised its business and how responsibility for monitoring advisers was allocated to senior management. In turn, this led to concerns about the monitoring of the quality of pension switching advice given by advisers between April 2006 and August 2008.
The FSA concluded Palmer failed to establish and maintain a clear and appropriate reporting structure to ensure senior management understood and carried out their responsibilities for monitoring the network’s advisers. He also failed to ensure the firm complied with rules and requirements to ensure that pension switching advice was demonstrably suitable.
The regulator found he also did not ensure that the firm recruited sufficient and adequate compliance and support staff during a period rapid expansion of the firm’s network of advisers.
The fine takes into account the changes Palmer made to the firm’s governance and compliance monitoring arrangements since December 2007 and following a visit from the FSA to ensure it complies with FSA standards and treats customers fairly. Because Palmer co-operated fully with the FSA and agreed to settle at an early stage of the FSA’s investigation, he qualified for a 30% reduction in penalty. Were it not for this discount, the FSA would have imposed a financial penalty of £70,000.
Margaret Cole, the FSA’s director of enforcement and financial crime, said: “This is the second enforcement action we have taken following the FSA’s review of pension switching advice. As the director of the firm