Matrix publicly censured by FSA for Gtep failings
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The FSA has publicly censured The Matrix Model Group for failings relating to the sale of geared traded endowment policies.
The firm started selling Gteps shortly after becoming authorised in 2004.
Between November 2004 and December 2006, the firm earned £328,000 in commission from Gtep sales and it continues to earn around £2,700 a year in trail commission.
The FSA visited The Matrix Model Group in May 2007 as part of a thematic review of Gteps. The regulator reviewed a sample of client files and found weaknesses in seven of the 10 files. In one case, there was no fact-find or notes containing relevant information. Three out of the 10 files showed that the customer had remortgaged their home to invest despite all three describing their attitude to risk as medium.
The FSA says The Matrix Model Group failed to ensure its suitability letters were tailored to individual clients, failed to ensure a consistent approach in classing customers’ risk attitude and it did not provide any documentation proving it researched alternative options for clients.
Following the FSA’s visit, The Matrix Model Group appointed a compliance consultant to carry out a past business review looking at 29 Gtep sales.
The company says it has contacted all its clients to highlight the concerns raised by the FSA and complete new client fact-find documents.
FSA head of retail enforcement Tom Spender says: “Failure to give suitable advice on the sales of complex investment products is unacceptable as it puts consumers at risk.”
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