The Financial Services Authority has fined St. James's Place UK, St. James's Place International and the St. James's Place Unit Trust Group a total of £250,000 for serious monitoring and record keeping inadequacies.
The failings exposed investors to the risk of surrendering existing investment contracts and committing money to new investment contracts in circumstances where this may not have been in their interests.
The fine is apportioned equally between the three companies, which are subsidiaries of the St. James's Place Wealth Management Group.
This disciplinary action relates to recommendations made to customers by the firms' appointed representatives to surrender and replace existing investment contracts that had been arranged by competitor product providers and the firms' monitoring of these transactions.
These two connected transactions are together referred to as “a replacement sale”. The firms' procedures for monitoring replacement sales failed to detect, and prevent, serious deficiencies in record keeping.
This meant that it was impossible to check whether or not the sales had been suitable for the nvestors without obtaining further information.
Andrew Procter, FSA director of enforcement, says: “Firms must understand that procedures to monitor advisers, particularly where high-risk transactions are being recommended, are not a 'nice to have', they are a necessity.
“It is essential that senior management take responsibility to ensure that procedures are in place to make sure that advisers are doing their job properly.”