The Financial Services Authority (FSA) has taken enforcement action against two directors of Perspective Financial Management for failures in relation to the promotion of unregulated collective investment schemes (UCIS).
Anthony Smith and Timothy Langman, who were also responsible for failures in relation to pension switching advice, have been fined £16,000 and £10,500 respectively, and prohibited from any senior management role in relation to UCIS.
They have also been prohibited from advising on UCIS.
The FSA has already taken action against PFM for shortcomings in the way that it monitored pension switching advice, resulting in customers' receiving unsuitable advice. For these failings the FSA fined the firm £49,000 in February 2011.
The FSA found that Smith, the director responsible for compliance, failed to:
• put in place adequate systems and controls to ensure the suitability of advice (in the areas of UCIS and pension switching);
• ensure PFM's systems and controls and procedures were reviewed and updated following the identification of significant concerns by an external compliance consultant;
• monitor the compliance function that he delegated to a manager; and
• take steps to have a sufficient understanding of the FSA's requirements around the promotion of UCIS.
The FSA concluded that Langman, who was director and training and Perspective's competency officer, had not ensured the areas of the business he was responsible for met FSA standards.
Specifically, the FSA found that he failed to:
• adequately address the concerns identified by two sets of compliance consultants that related to the competency of two of the firm's advisers; and
• take steps to ensure that he and the advisers for whose training he was responsible understood the regulatory requirements around UCIS.
The FSA said the failures of both Smith and Langman meant there was a risk that PFM's advisers might recommend pension switches and UCIS when they were not suitable for a customer.
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