Britain’s largest network of financial advisers has been fined £1,598,000 for charging providers for including products in their approved product selections.
The fine would have been £2.28 million, but the firm, Sesame Ltd, admitted wrongdoing to consumer watchdogs the Financial Conduct Authority at an early stage and were granted a discount penalty.
Sesame was also fined £6 million last year for giving unsuitable advice to customers.
This time, the FCA found providers paid to go on a list of restricted advice products Sesame’s advisers recommended to customers.
The company offers restricted advice from a panel of providers rather than independent, whole of the market advice.
Focus on customers
This was ruled as detrimental to customers as the firms that paid the most were recommended regardless of the suitability of their products to customers.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “Customers should be the priority for any financial business. Our reforms were aimed at making sure customers paid for advice so advisers did not earn commission for recommending products that might be unsuitable.
“Sesame’s approach was to look after the company’s own financial interests at the expense of the customer. Firms need to focus on the best outcomes for customers and not trying to find ways to earn money by circumventing the rules.”
The FCA revealed that the network asked providers to pay at least £250,000 to be considered as one of Sesame’s restricted advice panellists.
Warnings about bogus advisers
- Sapien Capital Limited (clone web site)
- PMG Forex (clone web site)
- Max Forex (clone web site)
- Asian Direct Capital Management
- Fidelity Capital Ltd / Fidelity Capital UK (clone web site)
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser