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FSA tells Widows to alter growth plan literature

The FSA has forced Scottish Widows to amend the literature provided on one of its products because of complaints that the information
was misleading.

The extra income and growth plan invests in a basket of 30 shares from the FTSE 100 index and promises investors a 10.25 per cent annual income plus the return of their capital at the end of the term.

But if any one of the 30 individual stocks falls by more than 20 per cent during the investment period, the full return of capital is not guaranteed. Stocks included are British Telecom, Voda fone, BP Amoco and Marks & Spencer.

Widows has had to add an insert to its product information marketing material drawing attention to the risks to capital.

Ads now inc lude the line: “There is some likelihood of a shortfall in capital.”

The advertising blunder comes hot on the heels of criticism of Widows&#39 European fund ads, which continued to boast about its past performance long after the departure of star manager Albert Morillo.

An FSA spokeswoman says: “We cannot comment on individual cases but if we do identify concerns with a company&#39s marketing material, we will take measures to ensure that customers are protected.”

Widows head of IFA marketing Bob Gibson says: “We have an ongoing dialogue with the FSA and we agreed between us to add the insert. We have now issued the inserts and contacted brokers who may have recommended this product.”

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