Endowment advice failings lead to FSA fines

10/10/2008

Mis-selling of endowments has led to two financial advisers being fined by the regulator.

The Financial Services Authority (FSA) fined Knowlden Titlow Financial Services £35,000 and Derrick Hales Financial Planning £10,500.

In addition, Derrick and Kathleen Hales are also no longer allowed to act in the role of compliance officer and compliance officer's partner.

The cases centre on the potential mis-selling of geared traded endowment policies (TEPs), a complex financial product which staff at each advisers were found to have insufficient knowledge of.

Jonathan Phelan, head of retail enforcement at the FSA, said: "We found with both firms that their advisers did not understand how these products work, nor could they show us they had a clear grasp of the risks involved.

"This made it impossible for them to properly advise customers whether the policies were suitable for them."

The FSA is currently conducting an ongoing investigation into the TEP sector, which means that further fines over its mis-selling are likely.

Tags; Debt Management and Banking, Retirement Money Problems,

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