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FSA/PN/129/2008
11 November 2008

The Financial Services Authority (FSA) has fined AWD Chase de Vere Wealth Management Ltd £1.12 million for serious failings in its pension transfer, pension annuity and income withdrawal business that resulted in mis-selling.

The FSA found that the firm mis-sold some pension transfers and pension annuities by recommending products to customers who already had adequate existing pension provisions or whose attitude to risk did not match the products recommended to them, for example. The firm has estimated that as many as 800 of its customers may have received unsuitable advice in relation to 1,200 sales between February 2006 and October 2007.

The FSA also found that the firm sometimes failed to properly disclose the risks and costs of the products it recommended, and was also unable to demonstrate the suitability of its advice from its own records in 39 per cent of the transactions which were reviewed. Based on a sample of recommendations, the FSA found that 28 per cent of transactions resulted in mis-sales.

Margaret Cole, FSA director of enforcement, said:

"Firms must treat their customers fairly by making every effort to provide them with suitable advice. This fine of £1.12 million reflects that AWD Chase de Vere failed to establish its customers' needs and did not provide them with complete and accurate information, which resulted in a large number of mis-sales.

"The FSA will report on its thematic work into the pensions transfer industry shortly to identify good and bad practice and demonstrate further to firms what we expect of them. Firms must take note of this work and amend their own processes where necessary."

In determining the level of the penalty, the FSA has recognised the firm has reviewed past business so as to compensate customers where appropriate, and provided significant co-operation with the conduct of the investigation. Without this remediation, the FSA would have imposed a significantly higher penalty. In addition, the firm qualified for a 30 per cent reduction in its penalty by settling at an early stage of the FSA's investigation.

Notes for editors

1. AWD Chase de Vere Wealth Management Ltd is based in Paternoster Square, London. The Final Notice for AWD Chase de Vere Wealth Management Ltd includes the background to the case, the relevant statutory provisions and the regulatory requirements contravened and the factors taken into account when settling the level of the fine.
2. The Firm is a major independent financial advisory firm and made about 4,300 sales of pension transfers, pension annuities and income withdrawals to approximately 2,800 customers between February 2006 and October 2007.
3. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
4. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.