This is one of a number of enforcement cases to arise from thematic work looking into the quality of advice processes in mortgage brokers undertaken by the FSA’s Small Firms and Contact Division in 2008.
Edward Allen and Ronald Allen, Directors of Homeplan, failed to:
· implement adequate systems and controls to ensure that the quality of mortgage advice to customers was up to the standard required;
· gather relevant customer information and ensure that recommendations given were suitable for the customer; and
· monitor adequately Homeplan’s sales of mortgage contracts and produce adequate management information.
In addition Edward Allen, during an extended period of absence from the firm, did not ensure his roles for direction and oversight of the firm were delegated effectively.
Jonathan Phelan, head of retail enforcement at the FSA, said: "Both directors lacked the competence and capability needed to make sure their firm delivered good quality mortgage advice. The failings were particularly serious because the FSA first identified problems with the firm’s systems and controls during a visit in 2006 and no steps were taken to remedy the situation by the time of the FSA’s visit in 2008.
“The failings warranted a fine of £15,000 for each director but as they have provided verifiable evidence that they would suffer serious financial hardship if this financial penalty was imposed, we have issued a public censure instead."
The trading permission of Homeplan has also been cancelled.
