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IMA: Ucis ban should not lead to further misselling

Andy Maysey IMA 200
Andy Maysey

The Investment Management Association has warned the FSA further Ucis misselling could occur if it permits the products to be recommended as a replacement product for existing Ucis investors.

The trade body has called on the regulator to make advisers undertake a review of a consumer’s risk profile before a replacement product is recommended in its response to the FSA’s consultation on Ucis products.

The FSA had proposed existing Ucis investors be exempt from promotion restrictions where the product was intended to absorb or take over assets in an existing product or an alternative to cash.

IMA senior adviser for retail distribution Andy Maysey says: “The FSA acknowledges that the original investment could have been missold and was unsuitable for the investor and, indeed, that the proposed re-investment product could be no more suitable than the original one.

“It seems odd that a further mis-sale is permitted without ensuring suitability for the investor.”

He adds: “On the face of it, the investor’s holding of a previously mis-sold unsuitable product does not render the investor any more sophisticated or capable of understanding the inherent risks in such products.

“Therefore, we would urge the FSA to consider the introduction of an obligation to review the consumer’s risk profile as part of the process surrounding any recommendation for reinvestment of proceeds.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. To: Andy Maysey

    It seems to me that you would be best versed if you were in charge of your brief. The ill thought through CP12/19 has a great big bubble of unintended consequences which you have clearly failed to look at or indeed think through. Is it really in the remit of the FSA to neuter Government Policy, some representing hard won concessions from Europe, which are designed to stimulate growth and create employment?

    It is precisely this drivel, so peddled, creates its own momentum. Ignorance is a wonderful thing. If you are going to bleat about a particular non-democratic attribute of a consultancy process, it would be helpful to understand what you are commenting about.

    If you worked for me I would censure you.

    Hope this helps.

  2. Have to agree with Andy Massey I’m afraid, the man is speaking perfect sense.

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