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FSA censures Cheshire Life & Pensions for income drawdown advice

The FSA has imposed a public censure on Cheshire Life & Pensions for failing to ensure its advice on income drawdown products was suitable.

During a treating customers fairly visit last year, the regulator found Cheshire had failed to gather or record adequate information about customers’ personal and financial circumstances to support its assessment of suitability.

It also found the firm had failed to adequately explain the reasons for recommendations, include adequate risk warnings in suitability reports about the recommended product and undertake sufficient research.

Director for small firms Lesley Titcomb says: “This is the first enforcement case arising from our small firm assessment programme on the fair treatment of customers.”

Titcomb warns that the public censure puts advisory firms on clear notice that they must have the right arrangements in place to ensure suitable advice is given and recorded for investment products such as income drawdown.

She adds: “We will continue to identify firms who fail to treat their customers fairly through our small firms assessment programme and other work and we will take action where necessary. This can and will include enforcement action and sanctions where appropriate.”

The FSA has required Cheshire to write to all its income drawdown customers, undertake a past business review and use an external compliance specialist to provide ongoing advice and oversight.

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  1. Julian Stevens 30th July 2009 at 5:15 pm

    FSA censures Cheshire Life & Pensions for income drawdown advice
    A very complex area and one that I for one woud approach with trepidation. But then, if the FSA could manage to get the ear of the Chancellor, it might manage to make a case for the abolition of the annuity trap, in which case we wouldn’t need Income DrawDown or any other of these complicated, risky and potentially toxic third way retirement income products, would we? Given that the FSA’s track record seems principally to be about bashing the industry one way or another, this could represent a real opportunity for it to do something massively positive for everyone. So come on FSA ~ you could, for once, be a positive spokesbody for the industry that’s forced to support your very existence.

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