Leeds-based independent financial advice company, Park Row Associates, has failed to give suitable advice, according to the Financial Services Authority (FSA) and has therefore been ordered to pay compensation to customers.
The City Watchdog has established that customers of Park Row Associates were at risk of receiving unsuitable advice about all of its financial products.
Customers who bought products through the company could be in line to receive payouts totalling up to an estimated £7.8 million. Some customers will be unaware that there was even an issue with Park Row and they will be contacted by an independent assessor.
Those who have any concerns about advice they received should contact Park Row.
Margaret Cole, head of enforcement at the FSA, said: “Park Row failed to take adequate action to address failings in systems and controls to ensure its advisers were giving customers suitable advice, despite the real risk of customer harm.
“The FSA has secured funding estimated at between £5m and £7.8m to ensure that where customers were not given suitable advice, or where Park Row can not demonstrate suitable advice, they will receive redress,” she added.
The business is now being wound down but the FSA said it had been able to secure the repayments to customers with the backing of the firm’s parent company, Royal Liver Assurance Limited.
Had the company not faced closure, the FSA said it would have also faced a fine of £2.4 million.