The regulator fined RHL £35,000 after it was revealed the firm had exposed over 900 people to the risk of being sold unsuitable products.
The FSA found RHL had failed to demonstrate product suitability and had not provided customers with relevant key facts illustrations (KFIs) at the appropriate time. The regulator also found failings in its handling of complaints and expressed its concern at the ‘inappropriate extent’ to which the firm had relied on external consultants for overseeing compliance-related matters.
Commenting on the regulator’s action, Stephen Bland, director for small firms at the FSA, said: “RHL’s management failed to take adequate responsibility for the business to ensure compliance with the FSA’s principles and rules and the fair treatment of its customers. Where and when appropriate, the FSA will use its enforcement powers to ensure that management take seriously the requirement on firms to comply with regulatory requirements and treat customers fairly.”
Phil Perry, director at ARK Financial Planning, said intermediaries needed to be aware of the changing compliance procedures. He said: “In this day in age, firms need to have a dedicated compliance officer. It is very difficult to cover every area and to have 100 per cent coverage every day so you need someone working solely on this area. It is up to the individual company to make sure they are keeping up with developments, and if they are getting in outside help then these companies are only as good as you want them to be. Each firm must be responsible for themselves”
Following the FSA fine, RHL has ceased conducting all regulated business. RHL is not part of The Rainbow Group, which incorporates Rainbow Mortgages Ltd and Rainbow Loans Ltd.
