The FSA has fined Derbyshire-based firm Sett Valley Insurance Services and its two partners £49,000 for failing to treat customers fairly and exposing them to "unsuitable advice".
Partners Leslie Lugsden and John Hargreaves failed in their roles to ensure adequate advice was given to customers and were also responsible for inadequate systems and controls.
The pair 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.
The failings at Sett Valley - which the FSA says highlights the risks posed by a failure of senior management - came to light during an FSA inspection focussing on TCF.
A subsequent 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 suitable advice was given.
The regulator says the firm failed to communicate with customers in a clear, non-misleading and fair manner. Its systems and controls were also inadequate and failed to meet the regulator's requirements.
Sett Valley will appoint an external compliance consultant to conduct a business review of products sold and compensate customers who may have suffered loss.
FSA director of enforcement and financial crime Margaret Cole says: "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."
Had the partners not agreed to settle the enforcement action at an early stage, the fines would have totalled £70,000, adds Cole.
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October