Behind most problems relating to financial promotions lie faults in the way in which the product being promoted was constructed. Both manufacturers and distributors need to be aware of this.
Last month, the FCA fined Yorkshire Building Society and Credit Suisse for issuing defective financial promotions for a structured deposit product. Neither the manufacturer, Credit Suisse, nor the distributor, YBS, seems to have understood what their customers were entitled to receive from what they were offering.
Before marketing any product, one has to know the answer to all the customers’ queries along the lines of, “If X happens, what will I receive?” The promotions also promised a particularly attractive maximum return which was most unlikely to be achieved.
On financial services websites, one often finds products described obscurely because the providers do not understand them or because they want to cover up something embarrassing about the product.
Adam Samuel is an independent compliance consultant