Blog: N&P’s shoddy practices cost it £52m, but when will the FSA pay?

The FSA this week fined N&P £1.4m for giving unsuitable advice on Keydata products, on top of the £51m it must pay out in compensation.

For people who tuned into the Keydata-N&P saga last August, the enforcement action may have come as a surprise.

Then, N&P chief executive Matthew Bullock said he would find it “puzzling” if the FSA and the FSCS failed to rule investors lost money because of internal fraud at Keydata, adding indignantly: “Just because you advise somebody and the product fails doesn’t mean to say you’ve mis-sold it.”

True, except when you have mis-sold it, which N&P IFAs did, a lot. While you were at the helm Mr Bullock.

Instead of taking responsibility for the systematic mis-selling problems at N&P, Bullock, who stepped down on 31 March, tried to pass the buck – and more crucially the bill – to FSCS levy payers.

“I’d rather the FSCS stepped in than us try and sort out who we think we’ve mis-sold to,” he said in the same interview. I bet.

N&P has finally paid heavily, if reluctantly, for its incompetence. It looks likely to cost the building society its independence in the form of a takeover by rival Yorkshire. Bullock’s own departure has been sped up by the fiasco.

But what about failings further up the ranks, at regulatory level? When will the FSA pay for its failures?

To miss such serious and widespread examples of customer detriment, the FSA must have matched N&P failing for failing. So how big a censure and fine would the FSA receive for its behaviour if it was one of the firms it regulates?

A list of N&P’s failings can be found here. Read it – it is a great blueprint of how not to run an advice business.