Directors of the firm, Stephen Hunt and Jonathan Edwards and adviser Gary Forster have also had partial prohibitions imposed by the regulator.
The FSA said it found a number of failures at the firm resulting in 426 clients near or at retirment age being potentially exposed to the risk of receiving unsuitable investment advice.
During the investigation the City regulator found 39 investors were advised to invest in Unregulated Collective Investment Schemes (UCIS) because Rockingham failed to understand the regulatory restriction on the promotion of these investments.
Ucis are regulated by the FSA despite their unauthorised status and are not allowed to be promoted to the general public in the UK.
The FSA said the investment collectives should only be propsed to sophisticated investors and high net worth individuals.
Another fault found with Rockingham was that it gave investors misleading descriptions of its pension draw down offering called the Retirement Income Tri-Investment Account (RITA), by calling it relatively low risk.
Hunt and Forster have been banned from holding the significant influence functions and the controlled customer function relating to any regulated activity promoting or recommending Ucis.
Edwards has been banned from performing compliance oversight in any regulated firm and from performing the customer function relating to any regulated activity promoting or recommending Ucis.
The FSA added that Edwards would have been fined an additional £20,000 if it had not been for evidence that this would cause serious financial hardship.
Tracey McDermott, acting director of enforcement and financial crime, said: "Rockingham and its advisers made the mistake of selling products that they did not fully understand. Rockingham and its advisers put hundreds of investors potentially at risk by advising them to put their money in Ucis and the complicated ARM Bond."
The regulator has previously taken action against a number of other firms and individuals in relation to Ucis and said it has repeatedly emphasised the importance of suitable advice surrounding these investment vehicles.
