View more on these topics

FSA approved precipice bond brochures by NDF

The FSA had been checking NDF extra-income and growth plan marketing material for five years before thousands of investors lost much of their capital on the plans.

Money Marketing has seen an FSA note of a meeting between NDF and the FSA in December 1999 in which the regulator questioned NDF marketing material. The note says the FSA is “not criticising the product itself, which we accep- ted was not as risky as some other products but we were concerned about the balance of the brochure”.

The note then outlines conditions under which NDF would ensure that all future brochures would be amended. It adds: “We are not inclined to ask to write to investors regarding this product but would like them [NDF] in the future to take on board the comments made and to let FSA have an opportunity to comment on any future advertising promotion prior to going to press.”

The firm agreed to do this.

The note then goes on to say: “We agreed that NDF would write regarding the content of this meeting and agreeing to a future pre-review of adv- ertising material.”

Versions of the plans then lost investors millions. They were later dubbed precipice bonds by the FSA. The Financial Ombudsman Service is now adjudicating that some of the plans have been missold.

IFAs are concerned that they are losing cases with the FOS on material not only reviewed by the FSA but also placed on recommended panels by their networks and on which they say they did not give advice.

Fox Financial Management principal Michael Fox says: “I am fed up with advisers taking all the heat for what is obvio- usly misleading product information fed down to us.

“This was the first time that I had ever used a DBS/Ses- ame research panel product and definitely the last. I would like to see Sesame take res- ponsibility for inaccurate product provider sales material. If the FSA has been involved in approving these brochures, then it should accept some responsibility.”

Sesame spokesman Jared Aitken says: “We operate a robust regulatory complaint process and each case is investigated on its own individual circumstances.”

The FSA says it works with firms to ensure that marketing material is clear, fair and not misleading but would not comment on NDF.

FOS spokeswoman Emma Parker says: “Even in cases of direct sales, where meetings take place, it must be made absolutely clear whether advice is or is not given. The marketing material is not the only factor that we consider.”


DWS closes Ratebuster fund

DWS is closing its popular Ratebuster fund just six months after launch. The fund, which sold over 60m in its first launch period in March, has been pulled after Aberdeen decided it did not fit with its plans for DWS, its deal for which completes on September 30. Investors wanting to pull out of the […]


FSA slip-up reveals its view of depolarised industry

The FSA has unwittingly broken its silence on the emerging shape of the IFA market post-depolarisation after mistakenly releasing deleted extracts from a recent speech by chairman Sir Callum McCarthy.In the original draft of the speech given earlier this week, McCarthy suggested that most IFAs have managed to adapt to depolarisation and the requirement to […]

Remortgages hit two-year high

The Council of Mortgage Lenders reports remortgaging boosted lending figures in August 2005, with gross mortgage lending rising by 9 per cent from July. Lending of 27.5bn in August resulted in the highest reported figure since July 2004. Remortgaging rose 15 per cent to 11.7bn from 10.2bn in July, the highest figure since October 2003.

Multi-managers go back to tech

Multi-managers Miton Investments and the Iimia are investing in technology funds amid growing optimism of a recovery in the sector.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm