as adviser fined £1.12m
Dozens, possibly hundreds, of West Midland customers of independent final adviser AWD Chase de Vere Wealth Management are in line for compensation after the well-known independent financial adviser was fined £1.12 million yesterday for mis-selling pensions.
The Financial Services Authority condemned Swiss-owned Chase de Vere, for “serious failings”, giving unsuitable advice over pension transfers, pensions annuities and income withdrawals.
It said the firm, one of Britain’s biggest financial advisers, estimated it could have given bad advice to as many as 800 customers over 1,200 sales between February, 2006 and October, 2007.
It sold 4,300 pension transfers, pension annuities and income withdrawals to around 2,800 customers.
The FSA found it failed to disclose properly the risks and costs of the products it recommended and could not demonstrate the suitability of its advice from its own records in 39 per cent of the sales reviewed. The regulator found 28 per cent resulted in a mis-sale.
“They are contacting people who might have been mis-sold with a view to remediation,” said a FSA spokesman. “They have started the process of compensation with a view to completing it in August.” Chase de Vere’s West Midland office in Church Street, Birmingham, has 3,200, served by 12 advisers.
The shortcomings came to light in March, 2007, when FSA officials visited AWD Chase de Vere in the course of its “treating customers fairly” programme.
“There was no tip-off, or particular expectation,” the spokesman said. “The big thing was recommending products to customers who already had adequate pension arrangements.”
The long-established firm, named “IFA of the year” in 2007 by the magazine Money Marketing, was bought in 2005 by AWD, which claims to be the biggest independent advisory business in Europe. AWD is majority-owned by Swiss Life.
Within a month of the FSA visit, it installed a new UK chief executive, Mike Kirsch. He was joined two months later by Mark Broadhead as legal and regulatory director.
Mr Kirsch said yesterday “We very much regret the regulatory lapses which occurred in the past and our new management team has worked very closely with the FSA to correct matters. We regard any lapse in standards as unacceptable, however, fewer than one per cent of clients have been affected and we are in the process of identifying all the cases and taking steps to address and compensate clients.
“I would like to apologise to all our clients who have been affected.”
The FSA said the fine would have been ‘significantly higher’ but for Chase de Vere’s co-operation and moves to pay compensation. It had qualified for a 30 per cent reduction in penalty by settling at an early stage of the investigation.
Margaret Cole, the FSA’s director of enforcement stressed “Firms must treat their customers fairly by making every effort to provide them suitable advice.”