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Firm may have to pay £7.8m to customers

Published on 24 Feb 2010 under category: legal

A national IFA network may have to pay back clients around £7.8 million for making unsuitable sales.

The standards watchdog, the Financial Services Authority (FSA), found that Park Row Associates Limited (Park Row) failed customers on several counts, including giving poor advice and not seeking evidence for suitability for some of the sales.

In some instances, advisers may have pushed products in order to gain higher commissions.
Many of these faults had been identified before, but no action had been taken to address the problems.

Peter Sprung, Park Row's former chief executive was banned for working in any controlling role for the next five years and fined £49,000.

Margaret Cole, FSA director of enforcement, said: "Park Row failed to take adequate action to address failings in systems and controls to ensure its advisers were giving customers suitable advice, despite the real risk of customer harm.

"The FSA has secured funding estimated at between £5m and £7.8m to ensure that where customers were not given suitable advice, or where Park Row can not demonstrate suitable advice, they will receive redress."

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