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Integrity chief says FSA probe was misguided

Former Integrity Financial Solutions chief executive Iain Stamp has defended the firm’s geared traded endowment policies, saying the FSA caused the firm to go into liquidation due to a “misguided” investigation.

The FSA censured the firm in May for failing in its role as a provider and adviser of geared Teps. Integrity is in voluntary liquidation and the FSA has instructed the liquidator to write to all clients informing them they could be entitled to make a claim.

The FSA waived a £350,000 fine so any money could be used to meet claims.

The FSA found Integrity failed to communicate the suitability of a geared Tep for clients and IFAs were not given balanced information about the risks.

Stamp insists the marketing material was clear and fully explained the risks. He claims the FSA did not understand the nature of what was being offered and refused to meet him. He says: “The firm is of the view the investigation was biased, unnecessarily costly, intimidating and uncooperative, commercially restrictive, misguided and has caused immeasurable reputational damage to the firm, all of which has ultimately caused or very largely contributed to the firm’s demise.”

Stamp is founder and chief executive of innovativeFD, a recently launched firm offering investment services to the institutional and IFA markets.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Incompetent Regulators Award Team 18th June 2010 at 8:39 am

    The FSA are a disgrace! I would have more faith in an incompetent salesman than any of the crooks at Canary Wharf. At least the consumer can say no to the salesman, but firms can’t refuse to deal with the FSA. They know nothing and are arrogant with it. The law is an ass!

  2. Jeremy Newbegin 18th June 2010 at 9:40 am

    It is interesting that Iain Stamp does not refer to the grief caused to Integrity clients. He worries more about his company. The facts are that many clients did not sufficiently understand the risks and therefore in many, if not most cases, geared traded endowments (teps) were not suitable. These geared teps were also used by many advisers to sell other products again not suitable. Those IFA’s who sold these geared teps and can be shown to have not accessed sufficiently the clients risk attitude should not be allowed to continue advising – and I don’t care what qualifications they have! They also did not take enough care over due diligence.

    The FSA has also to take some responsibility because it did not act quickly enough. It tried closing the stable door after the horse had bolted. The FSA was made aware of this particular problem some years ago but clearly did not have the ability top flag this and act. This is a trait that the FSA suffers from all too often – and the banks are an obvious example.

  3. Robert Donaldson 18th June 2010 at 11:01 am

    If Ian Stamp believes this is the case is he going to do something about it and take on the FSA.

    It is all very well bleating about the FSA but what does he intend to do about this matter?

  4. Paul Johnson IFA 18th June 2010 at 11:21 am

    Iain Stamp has a cheek to say the least. Lets ignore the fact he is still out there flogging thes dodgy investments under another banner of convenience, but concentrate on the fact that he mate a fortune out of selling complicated unrealistic investments via greedy advisers who were offered the carrot of outrageous commission.

    The fact he is not selling double glazing is the most surprising element here, not the fines.

  5. Love it! Take a cautious investor with an unencumbered property…..get them to gear up by taking out a mortgage out. Bung this into a bond, gear up AGAIN with a loan from some dodgy lender, then buy some Teps with the resultant pot.

    Pay huge amounts of commission to the floggers and churners and there you go…. a perfect cautious investment.

    You really could not make this up! 🙁

    Oh, and as a final insult when it all goes pear shaped, make out that the firm was an IFA rather than a provider and throw the liability onto the IFA levy…. making the pro IFAs who told Iain to stuff his investment pay for the damage.

    God, why be an IFA?!

  6. Dathan – well put.

  7. FinancialAdviceLiability 26th June 2010 at 9:32 am

    Once again I challenge any IFA to justify his/her recommendation of an Integrity Plan to a client. I am still unable to conceive of a single instance where an Integrity Plan could have been considered an appropriate investment on the basis of risk/reward.

    Iain Stamp is obviously financially innovative for the benefit of himself, incompetent advisors and irresponsible lenders BUT all at the expensenof unfortunate Investors.

    The crux of the Integrity Scandal is the role of both Bank of Scotland and Newcastle Building Society, as the lenders, without whom the Plans could not have been sold.

    The FSA is either incapable of comprehending the fundamental responsibility of the HBOS & NBS in enabling the rape of approximately 680 Investors or more likely unwilling to take action against them and hold them accountable for another example of morally reprehensible lending.

    The Integrity Plans were inherently toxic which any competent advisor should have recognized

  8. Stamps’s marketing material may have been clear to him but was certainly lost in translation to the poor clients involved. Both Bank of Scotland and Newcastle B/Soc played a part in crafting a loan agreement with out any direct representation which is now causing considerable hardship and concern as clients are having addition security stripped away from them.

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