The Financial Services Authority (FSA) has handed AWD Chase De Vere Wealth Management, the financial adviser, a £1.12 million fine for serious failings that the regulator concluded led to pensions mis-selling.

The fine would have reached £1.6 million had the group, a subsidiary of Germany's AWD, not agreed to settle early and start paying compensation to customers who had lost money as a result of poor advice.

The FSA said that as many as 800 people may have been badly advised in relation to 1,200 sales overseen by the adviser during the19 months between February 2006 and October last year.

It is the largest fine for pensions mis-selling levied by the FSA for more than five years. In September 2003, the regulator fined Lloyds TSB £1.9 million for pensions malpractice.

It is also the third-largest FSA penalty this year, after the regulator last month fined Alliance & Leicester £7 million for serious failings in the telephone sales of payment protection insurance.

Credit Suisse's UK operations were fined £5.6 million in August for failings relating to derivatives pricings. The Swiss bank was hit by several rogue dealers and lost substantial amounts of money as a result.

The FSA said the firm mis-sold pension transfers and pension annuities by recommending unsuitable products to customers who were already covered.

It also said the group failed properly to disclose the risks associated with the products it was recommending.

Margaret Cole, the FSA's director of enforcement, said: "Firms must treat their customers fairly by making every effort to provide them with suitable advice."

It said Chase had mitigated some of its failings by restructuring senior management, overhauling its compliance checks and changing its reward policies for sales managers.

Sales managers found to have mis-sold pensions were also fired in some circumstances, the FSA said.

Chase De Vere has agreed to make compensation payments where necessary by next August. It accepted the FSA's findings and has paid the fine.

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