London broker hit by FSA fine

London broker hit by FSA fine


The Financial Services Authority has fined a London based IFA firm £24,500 for exposing customers to unacceptable levels of risk of receiving poor pension switching advice.

The firm, Robin Bradford (Life and Pension Consultants) Ltd, is also reviewing the pension switching advice conducted during the period in question to see whether any redress is required.

During its investigation, the FSA found that between 6 April 2006 and 21 April 2008, Robin Bradford exposed customers to the risk of receiving poor advice by failing to obtain and record relevant information from its customers to assess whether advice was suitable, and failing to include relevant information in suitability letters to help customers make an informed choice on the decision to switch.

It also failed to adequately monitor the quality of its pension switching advice.

More specifically, in a review of ten of the firm’s pension switching files, selected randomly, the FSA found that 8 files did not contain a ‘fact find’ document; 2 files did not have an assessment of the customer’s attitude to risk; 2 files did not contain a suitability letter and 3 files did not contain an explanation of the advantages and disadvantages of switching pension.

The FSA also found Robin Bradford put customers at risk when it issued a direct offer financial promotion on switching pensions that contained a recommendation and therefore constituted advice.

In this way, the firm’s failure to communicate in a way that was clear, fair and not misleading put customers at risk of receiving unsuitable advice, as advisers had not assessed the suitability of the recommendation for each customer.

Tom Spender, head of retail enforcement at the FSA, said: “Robin Bradford Ltd exposed its customers to an unacceptable level of risk when they sought advice about pension switching. Encouragingly, the firm has acknowledged its failings and put in place new measures to reduce the risk of poor advice; furthermore it is reviewing the pension switching advice conducted during the relevant period to see whether any redress is required.”

This is the third enforcement action following the FSA’s review of pension switching advice.

Because the firm co-operated fully with the FSA and agreed to settle at an early stage of the investigation, it qualified for a 30% reduction in penalty. Were it not for this discount, the FSA would have imposed a financial penalty of £35,000.

Leave a comment