The Financial Services Authority has fined two former directors of A2O, an independent financial advisor network based in the UK. 

Andrew Ruff and Richard Lindley were fined £28,000 (about $46,000) and £14,000 respectively for widespread compliance failings which led to the risk of customers receiving unsuitable investment advice. Ruff has also been banned as he was primarily responsible for the compliance arrangements at the firm.

The FSA offers a string of reasons for Ruff and Lindley’s penalties: heading the list is their responsibility for the control and monitoring of the sales made by A2O’s appointed representatives. They failed to ensure systems and controls weaknesses were addressed; they failed to gather information; they lacked control and oversight over the network of advisors; and they failed to take appropriate action to correct the behaviour of appointed representatives when they became aware of potential compliance risks.

“Those who oversee networks of appointed representatives need to ensure that they keep a close eye on the advice being given throughout their network, especially where the advice includes high risk products. If there are failings in the way customers are treated anywhere in the network, the principals will be held to account,” warned Tracey McDermott, acting director of enforcement and financial crime at the FSA.