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FSA threatens clampdown on &#39misleading&#39 IFA Isa guides

The FSA is threatening to crack down on IFAs and discount brokers who produce Isa guides, saying it has serious concerns about the fund selection and the commission paid by fund managers whose products appear in them.

Speaking at the Pep & Isa Managers&#39 Association Annual Conference last week, FSA managing director consumers, investments and insurance directorate John Tiner said the regulator received a large number of complaints from consumers who felt they had been misled by some of last Isa season&#39s batch of guides.

Of the 14 guides the FSA investigated, eight rang alarm bells, Tiner said. He has questions about how the funds are selected, who is responsible for selecting the funds and what the commission arrangements are between the fund manager and IFAs.

Tiner threatened to use the full weight of his regulatory powers to prevent guides being distributed that do not heed the FSA&#39s warning.

Tiner said: “We have received quite a number of complaints about them. Consumers have concerns about Isa guides being misleading. They are purporting to give an independent view of what is going on.”

Best Invest deputy managing director Jason Hollands says: “In a lot of the guides last year there was 100 per cent correlation between those who advertised in them and those recommended by them.

“We know in some of the cases the guides were put together by ad agencies, so effectively by non-regulated individuals.”

Chartwell associate director Sue Whitbread says: “Some of the things put out as guides are not really guides in our opinion. What the FSA is planning to achieve should be reflected by all of us.”

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