FSA fines Braemar

Braemar Financial Planning has been fined £182,000 by the Financial Services Authority (FSA) for systematic failings in its sales process for pensions unlocking. In theory, pensions unlocking allows people aged 50 and over to take some or all of the benefits of their pension in a lump sum and/or income before they retire.

However, the FSA discovered that between November 2002 and November 2005 Braemar had not been taking reasonable steps to make sure advice given to potential clients seeking to undertake pension unlocking schemes was customer specific.

The FSA deemed the failure by Braemar to give out suitable recommendations to be "very serious, because by unlocking or releasing their pensions early, consumers face the risk of having less than they expect to live off in retirement".

Clive Briault, FSA managing director of retail markets said: "Braemar is one of the largest players in this sector of the industry, and it should have been able to demonstrate that product recommendations were suitable for its customers. When unlocking a pension, the onus is on the firm to ensure that the customer is aware of all the risks within the product as well as any alternative options available to them."

Braemar was fully compliant in the investigation, and this was reflected in a 30% reduction being levied on its fine, originally set at £260,000.