PIA levies huge fine on Sun Life of Canada
While the setting up of the Financial Services Agency proceeds apace the Personal Investment Authority continues to exercise its authority to regulate, reprimand and fine financial institutions which transgress its rules. One of its main tasks has been the monitoring of the review of personal pensions selling and it has made its dissatisfaction with the pace of the review known on a number of occasions. It has also levied fines on firms who are not proceeding as quickly as they should with their review.
There have been large fines before but, nevertheless, it was startling to discover that, in April, two companies in the Sun Life of Canada Group have been reprimanded and fined a total of £600,000 plus £25,000 costs because, in the period prior to February 1997, they failed to take all reasonable steps to carry out a review of past pension transfer and opt-out business in accordance with the standards and specification of the PIA and the Securities and Investment Board. The two companies were Sun Life Assurance Company of Canada (UK) Ltd., and Confederation Life Insurance Company (UK) Ltd.
Also in April, the PIA fined Neilson Management Services of London Wall £20,000. Disciplinary action was taken because because the firm had failed to organise and control its internal affairs in a responsible manner, failed to keep proper records and to ensure that its investment business staff were suitable, adequately trained and properly supervised and failed also to have well defined compliance procedures. The Alexander Beard Group of Neston, South Wirral, Cheshire, was fined £10,000 and reprimanded for failing to establish a Training and Competence Scheme for its staff appropriate to its business.
Earlier actions by the PIA include a fine of £5,000 and the cost of a verification visit imposed on Petrie and Petrie of Weoley Castle, Birmingham where concerns exist about the firm's compliance procedures relating to organisation and control.
Julian Harris Financial Consultants of Ashford, Kent, were fined £10,000 because a monitoring visit revealed that the firm failed to seek relevant information about the circumstances and investment objectives of clients. The firm also failed to orhganise and control its internal affairs while recruitment, training and competence arrangements and monitoring of investment staff was inadequate.
Expulsions
Press releases from the PIA at the end of April reveal that three firms have been expelled:
These firms are no longer authorised to conduct investment business.
The membership of Focus Financial Planning of Leicester Forest East has been terminated because the firm's principal, Christopher Dunkley, has been adjudicated bankrupt.
Applications rejected
The application to join the PIA of Richard Johnson Associates of Wolverhampton, has been rejected.Following a pensions review monitoring visit, serious concerns were identified; serious rules breaches had been revealed; it had failed to respond to correspondence from the PIA and did not demonstrate compliance with the financial resources requirements. The firm had been authorised conduct investment business through its membership of FIMBRA. As a result of the PIA decision this authorisation ceases.
Also recejted were the application of Franklyn William Alexander of Swindon and Phillips Financial Services of Croydon, both sole traders. These firms had also been authorised conduct investment business through their membership of FIMBRA which now ceases as a result of the PIA decision.
Any investors concerned or affected by PIA's decisions can contact the PIA helpline 0171 538 8860.
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