FSA fines St James's £250,000

AN offshoot of HBOS was fined £250,000 today for poor record-keeping that exposed customers to unacceptable risk.

The Financial Services Authority slapped the fine on St James's Place Wealth Management Group for 'serious monitoring and record keeping inadequacies'.

The fine was split between subsidiaries St James's Place UK, St James's Place International and St James's Place Unit Trust Group.

Bad record-keeping meant it was impossible to check whether sales of investment contracts were suitable for customers without obtaining further information.

This had 'exposed investors to the risk of surrendering existing investment contracts and committing money to new investment contracts in circumstances where this may not have been in their interests', the FSA ruled.

The failings were identified by the Personal Investment Authority, a predecessor to the FSA, in August 2001. Another regulator, Lautro, disciplined the company for a similar offence in 1994.

FSA enforcement director Andrew Procter said: 'Firms must understand that procedures to monitor advisers, particularly where high-risk transactions are being recommended, are not a nice to have, they are a necessity.'

St James's, chaired by Sir Mark Weinberg, had co-operated and taken remedial action. Hugh Gladman, St James's legal director, said: 'No clients were disadvantaged.'