The Personal Investment Authority slammed the company for fundamental misconduct. It said Countrywide had even failed to identify who might be eligible for compensation over mis-selling.
In its findings, the PIA said Countrywide failed to work out who was on the urgent list for compensation - including people who had died or retired since being mis-sold a personal pension by an IFA.
The regulator said the network failed to monitor how much effort its members had made to look after the interests of victims of mis-selling, even though Countrywide was set up on the basis that it was responsible for individual members' regulation. It also failed to check whether the information given by its member firms was accurate.
Thousands of clients were owed on average pounds 8,000 each - money which had gone to paying for the IFAs' commission and life insurer's charges rather than to the client's retirement fund.
Countrywide, which represents 1,500 independent financial advisers and is the second biggest network in the country, admitted its errors as soon as the regulator visited it in August last year.
This helped to mitigate the size of the fine. In contrast, the country's largest network, DBS, a quoted company, was fined pounds 425,000. DBS had failed to admit its failings and co-operate fully with the PIA.
The fine is the fifth largest to be levied over mis-selling. Among the criteria used to decide the fine were the severity of the mis-selling, the firm's size and its attitude to the regulator.
However, the PIA pointed out that it had been aware of the need to clear up the cases more than two and a half years before, when regulators began the effort to clear up the scandal.
The regulator said Countrywide had now increased resources dedicated to compensating customers. But the network had missed the crucial December deadline for sorting out 90 per cent of the most urgent cases.
a fine record
Company Date Fine (pounds )
London & Manchester 28/1/98 525,000
Friends Provident 30/9/97 450,000
DBS Financial Management 3/9/97 425,000
Albany Life 2/12/97 375,000
Countrywide 6/2/98 250,000
M&E Network 14/8/97 100,000
Lincoln Independent 8/7/97 75,000
Berkeley Independent 23/4/97 70,000
Source: PIAReuse content