FSA censures Park Row Associates with £7.8m bill over misadvised customers

The Financial Services Authority (FSA) has publicly censured Park Row Associates, a network of UK independent financial advisers, and agreed a customer redress settlement with the firm of between £5 million and £7.8 million.
   
Park Row’s chief executive Peter Sprung was also personally fined £49,000 by the regulator. The regulator added that it had withdrawn his approval to work at the firm and that Sprung agreed not to perform a significant function at any firm for five years.

The FSA said Park Row was guilty of “serious failings” between January 2007 and January 2009 relating to sales advice that misled customers and led to unsuitable investment sales. The firm failed to ensure that adequate systems and controls were in place or that actions were taken to rectify problems highlighted “on a number of occasions”, it 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,” said Margaret Cole, enforcement director at the FSA.

The regulator said Sprung’s conduct fell short of expected senior management standards, failing to ensure the firm’s network of financial advisers properly demonstrated sales were suitable, particularly in relation to pension advice

Cole said: “As chief executive, Peter Sprung was responsible for ensuring 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.”