© Press Association 2010 »

CUSTOMERS of independent financial adviser Park Row are set to receive up to £7.8 million in compensation after being given bad advice by the firm, it has been announced.

City watchdog the Financial Services Authority said the group, which ran a nationwide network of independent financial advisers (IFAs), had failed to ensure products being sold to consumers were suitable.

The regulator said in some cases staff were offering advice to customers on products that they were not authorised to advise on.

There was also evidence to suggest that some may have recommended products based on the higher commission they would receive on the sale.

The FSA said it had secured funding from the group's parent company Royal Liver Assurance to pay redress estimated to be between £5 million and £7.8 million to customers who were wrongly advised.

The regulator found a number of serious failings at the firm between January 2007 and January 2009, including a failure to ensure that advisers were offering suitable advice to consumers at all times and for all products, while the company did not ensure it had adequate systems and controls in place.

It also consistently failed to take action to rectify the problems, despite the fact that the FSA highlighted its concerns with the firm on a number of occasions.

The FSA has also fined Park Row's former chief executive Peter Sprung £49,000 and withdrawn his approval to perform a controlled function at the firm, after he failed to take steps to ensure advisers were suggesting products that were suitable for consumers, particularly in relation to pensions.

He has also undertaken not to perform a significant function at any financial services firm for five years.

Margaret Cole, FSA director of enforcement, 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."