Sesame responds to FCA fine

The FCA launched an investigation into Sesame Limited’s compliance with Principle 8 (Conflicts of interest) and COBS 2.3.1R (Rule on inducements) between 1 January 2012 and 31 January 2014. Sesame has agreed to pay a fine totalling £1,598,000 for failings during this period.

John Cowan, SBG Executive Chairman, says:

“We recognise that the arrival of the FCA’s Retail Distribution Review introduced a step change in regulation and heralded a new relationship between product providers and distributors. As the market leader, we should have been more responsive to the wind of change blowing through our industry.

“In January 2014 the leadership was changed and the new executive team has been implementing a new and more transparent policy, as well as building a robust operation that will serve customers better in the future. This has led to significant improvements in our processes and controls, with customers’ best interests and quality outcomes placed firmly at the centre of all business decisions.”  

Sesame operates two restricted advice propositions for its Appointed Representatives in the Network. Today’s announcement relates to the construction of panels within Sesame’s ‘Focused’ restricted advice proposition, which was launched in July 2012. In its notice published today the FCA acknowledged that in July 2013, Sesame engaged an independent third party to undertake a review of the services that were offered by the Sesame Group. Following that review, Sesame voluntarily withdrew some of the services which were offered to providers.

The majority of Sesame pension and investment ARs operate within a second proposition, called ‘Universal’, which is not related to today’s announcement. The Universal proposition was created following the Group’s decision to move to a restricted advice model for pension and investment advisers in its AR Network. This was confirmed to Sesame ARs in February 2014, and firms started joining the new proposition in May 2014.