04 December 2013

Tribunal upholds FCA fine on firm for mis-selling complex investments


Harvey Knight

Partner | UK

The Tribunal has upheld the FCA’s decision to fine Westwood Independent Financial Planners (Westwood) £100,000 for communications and suitability failings in relation to geared traded endowment policies (GTEPs). Westwood is already in sequestration. The Tribunal upheld the FCA’s findings that Westwood breached two of its principles for Business and several FCA rules in relation to its sale of GTEPs, which are complex, long term financial products. Westwood advised investors to remortgage their home to raise capital to invest in GTEPs.

Westwood is the latest firm to be disciplined as a result of the (then) FSA’s thematic review into GTEPs and serves as a stark reminder to all advisory firms to ensure that all their communications to customers need to be clear and tailored to a particular client’s needs, to ensure suitability of its advice. In Westwood’s case, while the (then) FSA did not view Westwood’s communications as misleading, they were deemed to be not clear or fair as they did not properly consider alternative investments for consumers outside of the GTEP plan. Nor did the communications explain any of the plan’s inherent risks.

Category: Article