LIVERPOOL’S Royal Liver Assurance has been forced to repay up to £7.8m to customers of its independent financial advisor arm Park Row by the Financial Services Authority (FSA).

The financial watchdog revealed that it would have also fined Leeds-based Park Row £2.4m had it not been for the fact it is being wound down by Royal Liver ahead of closure.

The regulator also imposed a £49,000 fine on former Park Row chief executive Peter Sprung who has promised not to undertake a significant role at any company for five years.

FSA chiefs revealed its action today after ruling that Park Row had failed to ensure its sales were suitable.

Between January 2007 and January 2009 a number of serious failings by Park Row were identified in relation to the suitability of its customer advice, including a failure to ensure its advisers offered suitable advice to customers at all times and for all products and failing to ensure its systems and controls were adequate.

The FSA added that Park Row consistently failed to take action to rectify these failings, despite the fact that concerns were highlighted to the firm on a number of occasions.

It also said Mr Sprung’s conduct “fell short of what was expected of a senior manager of an authorised firm.”

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.

“As chief executive, Peter Sprung was responsible for ensuring that there were appropriate systems and controls at the firm and that it treated its customers fairly.

“He failed to do this despite being given the opportunity to do so on a number of occasions.”

The FSA said Mr Sprung would have been fined £70,000 but as he co-operated fully with the regulator and settled at an early stage he qualified for a 30% discount.

Royal Liver acquired Park Row in 2003. It is in the process of closing Park Row and it is reviewing the future of its Dublin-based sister company Citadel.

A Royal Liver spokesman said: “While Park Row continues with the winding down of its operational business, it, along with Royal Liver, remains in dialogue with the FSA around the issues raised and is committed to contacting customers who may have been affected and taking remedial actions where appropriate.

“Peter Sprung stepped down as Park Row chief executive on January 31, 2010.”