One of Shropshire’s leading firms of financial advisers has been fined almost £60,000 by a Government watchdog for advising customers to make risky investments.
Shrewsbury-based Pi Financial, of Morfe House in Belle Vue Road, has been slapped with a fine for £58,300 by the Financial Services Authority (FSA) for ‘serious failings’ relating to its dealings with 168 clients.
But the independent business, which employs up to 250 staff nationwide, escaped a fine of £83,363 by agreeing to settle early.
The company advised 168 customers over a three-year period to February this year to invest a total of £6 million in unregulated collective investment schemes and 362 clients to invest £20m in structured products, according to the London regulator.
Tim Sutcliffe, chief executive of the firm, said the matter related to two financial advisers at the company who were advising on complicated products which made up a tiny percentage of the overall business.
He said: “In regards to structured products, what the FSA have reported is an aggregated figure which means our clients were investing say £5 million and then it has kicked and each time they’ve reinvested because the fund has done what it said.
“We are reviewing all client files and to date we haven’t identified any who have suffered financially. If we find any that do, it will be addressed.”
The FSA said out of the sample of files it reviewed, about 50 per cent were deemed to be ‘unsuitable’. It said that in several cases, customers who appeared to have low incomes and limited assets and capacity for loss were advised by Pi Financial to invest in high risk products, which the FSA says was clearly not right for them.
Georgina Philippou, head of retail enforcement at the FSA, said: “Pi’s failings were serious. The firm sold unregulated collective investment schemes and structured products to ordinary retail investors, when these products were clearly unsuitable for their needs.”
She added: “For years we have emphasised the need for suitable advice. Pi made personal recommendations that clearly did not fit its clients’ individual needs and circumstances.”