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FSA in structured probe on provider-owned IFAs

The FSA is investigating whether provider-owned IFAs have disproportionately recommended the structured products of their parent firms as part of its wide-ranging misselling probe.

The move could leave Chase de Vere Financial Solutions, the Bank of Ireland-owned firm recently fined for a misleading bond promotion, open to more scrutiny as the only IFA with links to a structured product provider, Bristol & West, which is also a BoI subsidiary.

The regulator refuses to comment on individual firms but says the fact that only one company could be investigated is irrelevant to its aim of ensuring its better than best rules have not been breached. The rules are set to be scrapped later this year when depolarisation is implemented but the FSA is seeking assurance that the bonds were sold appropriately, both directly and with independent advice.

Chase de Vere FS savings & investments manager Anna Bowes says the IFA sold B&W&#39s guaranteed equity bonds but claims the firm can prove that the products, at the time of sale, were the best in the market.

Bowes questions why the FSA is scrapping the better than best rule, which Chase de Vere FS “whole-heartedly” endorses. The IFA was fined £165,000 in December for mailing misleading promotion material to 236,000 prospective customers.

She says: “We adhere very strongly to the better than best rules. We are very confident that we can prove the product we sold was the best out there. But we do not understand why the rule is going – suitability is absolutely essential.”

FSA spokesman Rob McIvor says: “We are looking at the generality of how these products were sold and whether there are any better than best issues, if there have been disproportionate recommendations. The fact that it may only affect one firm is irrelevant.”

•Former RJ Temple sales director John Johnson has been made redundant from Lighthouse. Johnson was one of the few surviving members of management from the now liquidated RJT who moved across to work for Temple Financial Planning at Lighthouse following the £1m deal in July. Temple sold large amounts of structured products.

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