FSA secures record repayment from IFA

By Lee Wild

Date: Wednesday 24 Feb 2010

The City watchdog has ordered an independent financial advisor (IFA) to repay customers between £5m and £7.8m and fined former boss Peter Sprung £49,000.

Park Row, owned by insurer Royal Liver since 2003, failed to ensure that advisers properly assessed the suitability of sales, didn’t offer suitable advice at all times or ensure its systems and controls were adequate, said the Financial Services Authority (FSA).

It also failed to take action to rectify the problems despite the fact that concerns were highlighted to the firm on a number of occasions.

As well as the fine, Sprung, CEO between January 2007 and January 2009, was banned from performing a “significant function” at any firm for five years as his conduct fell short of expectations.

The FSA said it would have fined the company £2.4m had it been able to pay and not been in the process of an orderly wind-down of its business.

"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,” said Margaret Cole, FSA director of enforcement.

“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.”

Royal Liver had tried to sell Park Row last summer after the unit reported a bigger-than-expected interim loss of £2.17m.

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