DBS fined record pounds 425,000 for failures linked to pensions mis- selling

DBS Financial Management, a firm of independent advisers, has been fined a record pounds 425,000 by the Personal Investment Authority (PIA), the financial regulator, for "serious failures" linked to personal pensions mis-selling.

The penalty, revealed in The Independent last month, is the largest to be imposed over the mis-selling scandal. In addition, DBS must pay costs of pounds 19,450.

In a parallel move, Ken Davy, chairman of DBS, would resign his position as member of the regulator's board of directors, the PIA announced yesterday.

Mr Davy said he had submitted his resignation with regret. He said he had tried to work "unstintingly for the good of consumers and the industry which serves them."

Joe Palmer, chairman of the PIA, said: "Ken has been a good colleague and will be missed at the PIA board but the crucial importance of the pensions review means that his decision to stand down was correct."

Shares in DBS, which have traded as high as 231p since the company's float on the stock market this year, fell 12p to 204p yesterday, valuing the company at pounds 90m. DBS, based in Huddersfield, West Yorkshire, operates a national network of more than 2,600 independent financial advisers (IFAs) working for 1,800 firms.

In return for a slice of their commission earnings, DBS undertakes to deal with compliance issues on their behalf, offering them a range of additional technical services. But a statement by the PIA said DBS admitted failing to "take all reasonable steps" to carry out its review of pension business undertaken in the past by its appointed representative firms.

The failure of firms to carry out pension reviews to more than 500,000 clients has acquired fresh political importance in the wake of government moves to speed up compensation payments to victims.