FSA 'takes action against stockbroker'

18/02/2010

Written by Neil Pointon

The Financial Services Authority has taken "robust" action against a London-based stockbroker for demonstrating poor sales practices and failing to monitor its advisers correctly - which might have repercussions for the professional indemnity (PI) insurance market.

Wills & Co was previously issued with a fine and requested to take remedial action, but the FSA has now prevented it from giving investment advice.

The company - which was also found to be failing to properly handle complaints from customers - will now have to write to all customers to announce the change in its circumstances.

It is reported the stockbrokers is currently in the process of winding down its businesses and if this was not the case the FSA stated it would have incurred a fine of £1.5 million.

According to the FSA, Wills & Co was found to be giving poor risk warnings and misleading information to its high-risk penny share customers.

Whilst it's not possible to insure against any FSA fine, PI insurance could be involved in covering losses incurred as a result of these failings.

Margaret Cole, FSA director of enforcement, said: "Directors must take their duty to meet our regulatory standards seriously or face the consequences. It is down to a firm's directors to set its culture and approach so that customers are treated fairly."

IFAonline recently urged anyone setting up a new business to first seek PI insurance advice.

© 2010 Adfero Ltd.

If no story is shown above, please visit our archive section, acessible via the archived stories and press coverage link at the foot of the PYV home page.

Click here to go back to archive list