The FSA fined Sesame this week for serious failings in the supervision of one of its network of IFA firms and for poor record keeping. The IFA firm was advising consumers to release cash early from their pensions
The FSA said the advice given potentially affected 3,205 consumers between August 1999 and May 2001. During this time Sesame was known as Kestrel Financial Management Limited and was renamed Sesame Limited on 1 August 2003. Sesame is responsible for the advice and regulatory compliance of its IFA network.
Andrew Procter, FSA director of enforcement, said: “Sesame allowed its appointed representative to release cash from consumers' pensions with insufficient regard to the impact this would have on their income.
“As an operator of a network of appointed representatives, it was Sesame's fundamental obligation to establish procedures to ensure that its appointed representatives carry out their functions in a way such that Sesame complied at all times with the FSA’s rules and principles.”
But Sesame has moved to quash concerns that this lapse in compliance monitoring will affect its mortgage ARs.
Patrick Gale, Sesame chief executive, said: “The fine and the actions relate to past issues that we very much regret. We have co-operated fully with the FSA and have now put in place a pro-active customer identification and compensation programme, as agreed with the FSA.”
But Richard Griffiths, managing director at Network Data, commented: “Sesame will be the first to admit that it has always boasted about its experience in compliance monitoring but this fine shows something seems to have slipped under the net. Whether this is systematic of some underlying problem with its compliance across the whole company, it is hard to say.
