The Financial Ombudsman Service (FOS) has ordered network Pi Financial to compensate two clients it recommended invest in an unregulated collective investment scheme (UCIS).
Last month, the Financial Services Authority (FSA) fined Pi £58,300 for recommending hundreds of clients invest in UCIS or structured products that were "clearly" unsuitable.
A FOS ruling seen by IFAonline, and dated 4 October, refers to one recommendation for a couple to invest in the Stirling Mortimer Global Property fund.
It ruled in favour of the cllients and has asked Pi to contact them to arrange compensation.
Some 168 clients were advised by Pi Financial to invest a total of £6m into UCIS, the FSA said.
Gareth Fatchett, partner at law firm Regulatory Legal, which is acting on behalf of 14 Pi Financial clients, said the network had sold "a lot of UCIS".
"Our clients are now waiting to see whether the firm will comply with the FOS final decisions," he said. "If not, then recovery action is inevitable."
Pi chief executive Tim Sutcliffe said the firm was currently in the process of dealing with "about 60" cases involving Stirling Mortimer, but was unable to comment on the specifics of the individual cases.
"The cases are being dealt with by our insurer who responds according to the circumstances," he said. "Every case is different, as you would expect."
He said the 60 cases represented "a very small number" of the UCIS business written by the market as a whole, and said the company's "robust" processes meant it was not exposed to either Arch cru or Keydata.
The Stirling Mortimer cases were written by only two of the network's 17 appointed representative firms.
"We are very fortunate we have put in place a robust system for [recommending UCIS]," he said.
"If the adviser wanted to use any alternative fund they were required to submit a request, upon which point we would produce a fund fact sheet and they would sit an examination evidencing their understanding of the fund, and we would seek the approval of our professional indemnity insurers.
"That has saved us from being exposed to Keydata or Arch cru."
The claims are fully covered by Pi Financial's insurance, and would not affect the financial stability of the business, he added.
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