Tenon fined £700k for structured products advice failings

RSM Tenon Financial Services has been fined £700,000 by the FSA for its poor sales and advice processes relating to Lehman-backed structured products.

It represents the first fine for a financial advice firm relating to the regulator's review of the marketing and distribution of Lehman-backed structured plans, which concluded in October last year.

Regulators found Tenon had failed to treat its customers fairly, failed to organise its affairs responsibly and effectively, and did not take reasonable steps to ensure its advice was suitable.

Tenon's advisers failed to fully assess the risks of structured products and consider these when recommending the products to customers.

Customer files were also found to be incomplete, with insufficient personal and financial information held on Tenon's files.

The firm also failed to implement appropriate compliance monitoring procedures.

In addition to the £700,000 fine, Tenon must conduct a past business review, and any customer who received unsuitable advice will be able to sell their product to Tenon in exchange for their original investment plus interest.

The company must also hire a skilled person to assess its sales and compliance processes.

Margaret Cole, director of enforcement at the FSA, says:"This is the first action we have taken for advice failings relating to Lehman-backed structured products following our recent review, and we acted swiftly and decisively in order to return money to investors as quickly as possible.

"We will continue to take tough action where we find evidence that firms are giving unsuitable advice to investors."