The Financial Services Authority (FSA) has fined Trigon Pensions Limited (Trigon) £10,500 for failing to monitor advisers effectively at its appointed representative, Trigon Financial Services (TFS).
TFS did not record sufficient customer information and was therefore unable to demonstrate the quality of the advice that was given. It also failed to implement and follow an adequate Training and Competence scheme for advisers and its suitability letters were inadequate.
Jonathan Phelan, head of retail enforcement at the FSA, said:
"Trigon's failures were serious and mirrored some of the main failings we found during our work into the process of giving financial advice last year. At that time we identified the key areas that firms needed to address which included Training and Competence, the production of clear suitability ?letters and controls for monitoring the advice process.
"We would urge any firms that have seen this case and haven't reviewed these areas to do so to prevent the need for us to take similar action against them. A firm's management is responsible for ensuring that it follows FSA rules and we will take appropriate action from the various supervisory and enforcement tools we have available where failings are found."
The FSA visited Trigon, which is based in Bristol, in January 2006. The FSA reviewed a sample of TFS's customer files, compiled from January to December 2005, as part of its work into the process of giving financial advice. The FSA briefed Trigon on the conclusion of the visit and later sent it a report. The FSA revisited Trigon in June to review further TFS files and it identified similar deficiencies to those found during the first visit.
The FSA's work into the process of giving financial advice was published in July 2006. It found many examples of good practice but, in an unacceptable number of firms reviewed, the work identified substantial failings. This review included 100 firms giving investment advice in both large and small financial advice firms.
The FSA has instructed Trigon to appoint an industry expert to carry out a past business review and Trigon agreed to settle at an early stage of the FSA's investigation. It therefore qualified for a 30% discount under the FSA's executive settlement scheme. Were it not for this discount the FSA would have imposed a financial penalty of £15,000.
