This week the FSA has fined two stockbrokers for poor sales practices and in one case, Wills & Co, failure to implement remedial action from previous failings.
For the WIlls and Co fine, Director of enforcement Margaret Cole says: “It is shocking that despite previous action, Wills & Co still failed to put its customers’ interests first.
“The FSA has made no secret of the fact that it expects higher standards of customer treatment in the stockbroking sector. What makes this case particularly serious is that the firm was fined by the FSA and promised the FSA that its treatment of customers had improved when that was plainly not the case.
Direct Sharedeal Limited (DSL) failed to provide adequate warnings to their penny share customers and Director of enforcement Margaret Cole said: “It is totally unacceptable for customers to be given misleading information, particularly when it relates to the risks of investing in penny shares. This applies whether that misleading information is given by an FSA authorised firm or by its appointed representatives.
“The small cap stock broking sector has been under increased vigilance by the FSA because of a need to drive up standards of customer treatment in this sector.
“This fine should serve as a warning to firms with similar business models that they need to be vigilant about what is going on at their appointed representatives – the responsibility lies with the authorised firm.”
CEI Compliance’ sister company ComplianceConsultant.Org provides remedial sales process and other systems and controls advice to firms that have had a disappointing FSA review. Often the remedial actions can be implemented reasonably quickly and provide all stakeholders with adequate satisfaction that measures have been taken. Contact us for details at remedial@cei-compliance-limited.co.uk or at remedial@complianceconsultant.org
