Imro fines pension firms pounds 400,000

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The Independent Online
Imro, the investment regulator, yesterday gave its firmest indication yet of the tough line it is taking in its review of pensions mis-selling by levying hefty fines against four independent financial advisers.

The fines, totalling pounds 405,000 plus costs for rule breaches inpension transfers, are the first imposed by Imro in relation to pension transfer business conducted before new guidelines on pension selling were introduced in July 1994.

Imro also said it was making "substantial progress" towards completion of the review of the pension transfer scandal and said the majority of Imro regulated firms would complete their review within the 31 December deadline.

The largest fine, of pounds 200,000, was levied against Godwins, based in Farnborough, for breaches of Imro's rules and of its statement of principles on pension transfer business between June 1988 and December 1993. Godwins will also pay Imro's costs of pounds 56,384 and make a contribution towards tribunal costs.

Imro fined Willis Corroon Financial Planning pounds 95,000 for breaches between December 1991 and October 1993, ordering the firm to pay costs of pounds 67,948 and make a contribution towards tribunal costs.

Heath Consulting was fined pounds 70,000 for breaches between June 1991 and April 1994 and ordered to pay costs of pounds 50,000.

The smallest fine was levied against Alexander Consulting Group, based in Glasgow, for breaches between June 1990 and December 1993. Alexander was fined pounds 40,000 but will also have to pay investigation costs of pounds 50,220 and make a contribution towards Imro's disciplinary costs.

These four firms conducted approximately 14,000 pension transfer cases, including 2,800 "priority" cases.

Hunter Devine, chairman of Godwins, said of the 1,167 priority cases it was analysing, it had so far established that only 13 individuals would need compensation of between pounds 5,000 and pounds 7,000 each.

Alexander said of the cases it had reviewed none had required compensation, while Willis Corroon expects that around 5 per cent of the 5,000 cases it is examining may require corrective action.

Imro is investigating 22 firms in all. Five have been given non-public written warnings for less serious breaches, three have been closed with no action required and another 10 are outstanding. In total, 30 firms are conducting their review under Imro, and 18 will have offered compensation by year-end.

Another 3,000 are being reviewed by the Personal Investment Authority, prompting some advisers to suspect that the regulator will not take as tough a line because of the sheer weight of numbers. However, a spokesman for the PIA insisted it would take disciplinary action where appropriate.