FSA fines IFA £24,500 for pension failings

The FSA has fined London-based IFA Robin Bradford £24,500 for pension switching advice failings.

The life and pensions consultants exposed customers to unacceptable levels of risk and gave poor pension switching advice, says the regulator.

Bradford failed to record information from its customers to assess whether advice was suitable, says the FSA, and did not include relevant information in suitability letters to help customers decide whether to switch.

During a review of ten of the firm's pension switching files, the regulator found eight did not contain a fact find document, two had no assessment of the customer's risk profile and three contained no information on the pros and cons of pension switching.

The FSA also pulled the firm up for issuing direct offer financial promotion on switching pensions.

"In this way, the firm's failure to communicate in a way that was clear, fair and not misleading put customers at risk of receiving unsuitable advice, as advisers had not assessed the suitability of the recommendation for each customer," says the FSA.

It also inadequately monitored the quality of its pension switching advice, added the FSA.

"Robin Bradford Ltd exposed its customers to an unacceptable level of risk when they sought advice about pension switching," says FSA head of retail enforcement Tom Spender.

"Encouragingly, the firm has acknowledged its failings and put in place new measures to reduce the risk of poor advice; furthermore it is reviewing the pension switching advice conducted during the relevant period to see whether any redress is required."

The fine comes to light as ongoing FSA investigations into poor pension switching advice are expected to result in firms paying out more than £150m in redress to customers.

The FSA has ordered 10 firms to review past sales and procedures as part of the regulator's clamp-down on unsuitable advice, but it is looking at 22 individual businesses in total.

Not one of the 22 firms identified by the FSA in 2008 as the worst performers for pension switching advice has improved in the interim, the regulator said earlier this month.

Prudential recently said many advisers have not been properly trained to use pension transfer tools, despite massive uptake in their use since an FSA review in 2008.

Meanwhile, recent research by IFASurveys polling over 200 advisers found almost half did not have a single coherent process for pension switching advice.