Definitions of misselling have started to flow in from IFAs and consultants as Money Marketing's campaign gets into its stride.
Adam Samuel Training and Consulting principal Adam Samuel believes there is an infinite number of combinations, fact situations, products and services with which advisers become involved and says the activity required of the adviser will inevitably be different.
Samuel says: “Unless you expect the FSA to be able to stipulate precisely what is required in this infinite number of fact patterns, which is quite unreasonable, you will have to settle for a loose definition or for the FSA's various outpourings.”
Momentum senior technical consultant Bob Perkins takes a slightly different view, asserting that the focus should not just be on IFAs.
He believes the FSA and the Government have helped to cloud the issue with the introduction of stakeholder products, which may in some ways result in unwary and poorly educated investors misbuying.
Perkins says: “More of the burden of proof should rest with the complainant who should be required to demonstrate that the advice received was negligent.”
Keep sending your misselling definitions and comments to: firstname.lastname@example.org
Where advice to a client is shown to have not been appropriate, given the client's circumstances at the time that the advice was given. This fits in with the suitable advice requirement that advisers must follow when giving advice.
Sesame Services senior researcher (pensions)
A clever ruse to shift the blame to the retailer from the FSA and the product provider on any investment which has been fully authorised which turns out to be mismanaged, structurally flawed or badly invested.
1: Failure to exercise reasonable care to obtain sufficient information about the client, product and external circumstances to be able to advise the client competently (know your customer). 2: Failure to disclose the relevant facts about what is being recommended, including the risks and disadvantages or giving inaccurate information about this (disclosure). 3: Failure to exercise reasonable care to give suitable advice (best advice).
Adam Samuel, Adam Samuel Training and Consulting
An excellent precedent is the Misrepresentation Act 1967: 'an act or omission which leads someone to form a contractual relationship'. Couple this with Supply of Goods Act (Services) definitions of merchantable quality and fit for the purpose.
Ross Thallon, IFA