A COMPANY that let loose poorly trained sales staff to sell endowments to young graduates has been fined £100,000 by the City watchdog.
The Financial Services authority said German-owned MLP Private Finance had used unacceptable German practices to sell mortgages and pensions between February and June 2001, when it pounced.
It found MLP guilty of giving poor training, monitoring and supervision of its investment staff and for weak selling practices.
'Had it not been for prompt intervention by the regulator, a considerable number of UK consumers could have been sold products that were unsuitable for their needs,' said Carol Sergeant, the FSA's managing director for regulatory processes and risk.
MLP told advisers told to sell endowments when more appropriate products were available, the FSA said. Its target market was young professionals, shortly after graduation from university.
The FSA said the main problem was that MLP had tried to adopt the business strategy of its German parent without considering the unique features of the UK financial services market and UK regulatory requirements. The FSA ordered MLP to temporarily halt business, re-train its sales force and review all business written.
'All firms, no matter how experienced they are in their home markets, must ensure that their selling practices are specifically tailored to meet the needs of their UK customers in the context of the UK market,' said Sergeant.
Early identification of the problems and the FSA's intervention limited the damage. Only a handful of customers were sold inappropriate policies. All were subsequently visited by MLP's compliance officer and appropriate remedial action taken.