The FSA has fined Derbyshire-based IFA Sett Valley Insurance Services and its two partners a total of £49,000 for failures with its sales and advice processes. The failings were identified during an FSA visit focusing on treating customers fairly, which is part of the regulator’s assessment programme for small firms. The investigation identified a number of problems with the firm’s sales and advice processes, including a failure to record sufficient information about customers’ personal and financial circumstances to ensure the suitability of any advice they gave, and a failure to communicate with them in a way that was clear, fair and not misleading. The firm’s systems and controls were also inadequate and did not meet the FSA’s requirements.
The FSA said both of Sett Valley’s partners, Leslie Lugsden and John Hargreaves, were responsible for the problems identified within the firm, and therefore failed in their roles as approved persons .
Mr Lugsden and Mr Hargreaves were each fined £10,500 for breaching the FSA’s Statement of Principles for Approved Persons.
Sett Valley was also fined £28,000 for breaching the FSA Principles for Businesses.
In addition, the firm has been ordered to appoint an external compliance consultant to conduct a phased past business review of products sold and compensate any customers who may have suffered loss.
Margaret Cole, director of enforcement and financial crime at the FSA, said: “It is unacceptable for a firm operating in this industry not to comply with the FSA’s principles and rules.
“The partners of Sett Valley failed to control their business effectively and exposed their customers to the risk of receiving unsuitable advice.
“The fine levied on Sett Valley reflects the seriousness of the failings found at the firm while the fines imposed on the partners demonstrate the importance we place on senior management discharging their responsibilities effectively.
“Had they not agreed to settle this enforcement action at an early stage, the fines would have totalled £70,000.”
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