MLP Private Finance plc fined £100,000 for varied failings

Firms must not employ “formulaic recommendations” when they advise on investment product sales was a central message of the final notice that the FSA issued to MLP Private Finance plc last month. The firm, formerly known as Marschollek Lautenschlager & Partners, was fined £100,000 for deficiencies in training, monitoring and supervision of investment personnel and for poor sales standards. The problems occurred in the interval February 2001 to June 2001 when branch managers, transferred from its German parent company and who lacked experience of UK financial services, employed fresh graduate trainee advisers. The managers were not PIA-authorised to conduct investment business at the time and therefore were not competent to advise or the supervise their trainees’ sales. As a result customers were directed to purchase endowment policies when other long-term savings vehicles would have been more appropriate, for example, for future house purchase and pension provision. Affordability of recommendations was not evidenced and life cover was included in the advice although the need for it was not recorded in the fact find.