The Financial Services Authority (FSA), the UK’s watchdog has allotted a £7.8M compensation bill and also fined the CEO of Park Row Associates Limited. Peter Sprung, the Royal Liver-owned firm’s former chief executive, was fined £49,000 and has withdrawn his approval to perform a controlled function at Park Row. He has also undertaken not to perform a significant function at any firm for five years.
Park Row Associates Limited (Park Row), a national IFA network owned by Royal Liver, failed to ensure its sales were suitable and secured customer redress estimated at between £5m and £7.8m. Royal Liver announced Park Row’s demise last October.
Between January 2007 and January 2009, a number of serious failings by Park Row were identified in relation to the suitability of its customer advice.
These include;
- failing to ensure that advisers properly evidenced the suitability of sales
- failed to ensure advisers offered suitable advice to customers at all times
- for all products and they did not have adequate systems and controls.
The FSA also criticised the national IFA for consistently failing to take action to rectify these failings despite the fact that concerns were highlighted to the firm on a number of occasions.
Margaret Cole, director of enforcement of the FSA, 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.
“As chief executive, Peter Sprung was responsible for ensuring that there were appropriate systems and controls at the firm and that it treated its customers fairly.
“He failed to do this despite being given the opportunity to do so on a number of occasions. As a result, he has been fined and can no longer work in a significant influence function for five years.”
