DBS confirms action by PIA

DBS Management, a network of personal financial advisers, said yesterday it had been informed that the Personal Investment Authority (PIA) had started disciplinary action against its DBS Financial Management subsidiary.

Earlier in the day, in response to an article in The Independent, DBS said it had no knowledge of any fine to be imposed on it by the PIA over alleged pensions mis-selling.

The article said a pounds 500,000 fine, which would be the largest made by the PIA for a rule breach, was close to being levied by the financial services regulator. The fine would be an embarrassment to Ken Davy, the chairman of DBS, who also sits on the PIA board.

While DBS said it did not know of any fine, it "considers its resources are adequate to cover such a penalty in the event of it being confirmed".

It said the article "apparently was based on information obtained in breach of confidence from the PIA".

Shares in DBS, which had initially eased 27.5p yesterday morning, fell further on the second statement and closed down by 67.5p at 1,077p, a fall of almost 6 per cent.

DBS confirmed its commitment to ensure that any investors who bought personal pensions through its members were properly dealt with under the terms of the pensions review by the Securities and Investments Board. It said it had made substantial provisions to cover the costs of accelerating the review.

DBS, based in Huddersfield, represents more than 1,700 independent financial advisers.The company provides compliance and regulatory help in return for a a slice of the commission from each adviser.

The company was founded in the 1970s by Mr Davy and became a network in the 1980s. It floated on AIM two years ago.