FSA bans director for advice failings

The Financial Services Authority (FSA) has banned Worcestershire financial adviser Norman Mark McCance for failings related to quality and suitability of advice and compliance at his firm, Penn Financial Services Unlimited (Penn).  Penn's main business was investment bonds.

The FSA found that Mr McCance lacked competence and capability and on occasions acted recklessly.  As Penn's sole director he also failed to ensure that the firm met FSA compliance standards.

Mr McCance as adviser:

• acted recklessly in arranging transactions which could not be justified in terms of suitability, particularly in relation to advising customers to re-mortgage to raise funds to invest in investment bonds which were unlikely to generate sufficient income or capital to repay the mortgages;
• acted recklessly in providing written loss guarantees to individuals who complained about the performance of their investment bonds, thereby deterring them from pursuing complaints about their investments;
• failed to record sufficient and accurate information about customers' personal and financial circumstances for assessing the suitability of recommendations;
• completed mortgage applications with inaccurate information; and 
• conducted pension transfers outside the scope of Penn's permission.

Mr McCance as director of Penn failed to:

• put in place adequate and effective compliance arrangements over the firm's business;
• monitor and/or review the firm's business by undertaking compliance checks; or
• improve the firm's compliance resources despite recognising these were inadequate.
  

Jonathan Phelan, FSA head of retail enforcement, said:

"It is vital that Approved Persons demonstrate the necessary degree of competence and capability when providing investment advice and overseeing compliance by a firm. Those who do not demonstrate the necessary degree of competence and capability face the risk of being prohibited from the financial services industry."

The FSA has also cancelled the permission of Penn.

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