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B&B misselling occurred despite regulatory warnings – FSA

The FSA says B&B’s misselling of precipice and with-profits bonds was made more serious because B&B was warned there were significant issues with the quality of its customer records but failed to act.

The regulator says B&B was warned on a number of occasions from 1998 onwards but failed to appreciate the significance of those warnings. It says the failings exposed 6,800 customers to a higher risk of financial loss than they were willing to accept.

Director of enforcement Andrew Proctor says: “During the period in question, BBG was the largest IFA in the UK and its brand had widespread public recognition which raised amongst its customers the expectation that the service it provided to them would be of a high standard. Customers therefore went to the firm with the expectation that it would provide a competent and professional financial advisory service.

“However, BBG’s advisers sold precipice and with-profits bonds without having in place adequate systems and controls to ensure the products sold were suitable. The FSA has repeatedly stressed to firms through supervision and guidance the importance of keeping adequate records of sales but BBG failed to do so in these cases.”

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