Structured product providers Investec Bank and Morgan Stanley & Co International have agreed to change the terms on some of their investment plans after the FSA deemed them to be “unfair”.
Investec Bank has amended the terms on its Investec FTSE 100 Enhanced Kick-Out Plan 21, while Morgan Stanley & Co International has changed the Morgan Stanley FTSE Gilt Backed Growth Plan 9 and around 45 other investment plans on the regulator’s guidance.
The FSA says the providers used terms that gave “broad discretion to cancel a customer’s contract if the customer breached the contract in any way”.
It says: “We were therefore concerned that customers would not know when [the providers] could cancel the contract or have the opportunity to rectify a breach.”
In the case of Investec, the regulator also believed that another term did not clearly explain the process for cancellations outside the 14-day cooling-off period or how much capital a client could lose if they withdrew from the plan outside of the cooling-off period.
Meanwhile, a term in Morgan Stanley plans may have offered the provider the discretion to make any changes to the contract while the circumstances in which a change could be made were not clear to customers.
Thomas and Thomas Financial Services managing director Darren Lloyd Thomas says: “The FSA has acted correctly here to ensure customers are treated fairly.”