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‘Fsa blaming IFAs for product providers’ marketing material’

The FSA is judging IFAs res-ponsible for product provider marketing material during mis-selling claims, a letter obtained under the Freedom of Information Act reveals.

In a previously unpublished letter from head of themes Chris Rexworthy to former Aifa director general Paul Smee, the FSA describes how IFAs are responsible for the provider marketing material they use.

This is because, while the FSA has no formal guidelines, it is using an informal policy to ascertain how reliant the adviser was on any marketing material when the product was sold.

The FSA highlights three key issues as to whether an IFA relied on the product information and is at fault for passing on details of it. These are whether they rely on the material for a customised recommendation, whether it is han-ded to the consumer “as is” and whether any material is repeated or reproduced for IFA material.

A number of IFA firms refused to comment on the details of the letter, saying that the subject was too contentious.

Rexworthy admits that even when the IFA hands over the information “as is”, they are still likely to discuss the merits of the product.

Rexworthy says: “In our view, the key to the degree of responsibility of the IFA/ intermediary lies in what he is holding himself out as doing. Reliance is a live issue when the IFA could be seen as making some kind of recommendation or giving advice.

“If an adviser does discuss the merits of a product, he is likely to be giving advice or making a recommendation about the suitability of the product concerned to the investor.”


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