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FSA complaint over firm based in Spain is rejected

FSA Front 480

The Complaints Commissioner has rejected a complaint against the FSA from a client who alleged they had received misleading advice from an authorised firm giving investment advice in Spain.

A letter from Sir Anthony Holland, published today, explained the firm was not regulated by the FSA at the time of giving the advice.

The unnamed firm, referred to as “Firm A”, had advised the client to invest in an Irish Life International bond.

The firm had received its Investment Services Directive passport from the FSA in July 2004 which then expired in September 2006.

Although the firm continued to hold the Insurance Mediation Directive passport, it was not permitted to give investment advice.

It was not until June 2007 that the client approached the firm for investment advice upon receiving marketing material from the firm.

In February 2010 the client complained about the investment advice they received which was not dealt with and the client then complained to the FSA in February 2012.

The complaint was rejected by the regulator.

The commissioner says: “I appreciate that you feel you were misled about the regulatory status of Firm A, but from the information you have provided the assurances you received prior to you obtaining financial advice appear to have come from the firm itself and the local Spanish office of the British Chamber of Commerce and not the FSA.”

The letter states the client should seek to take their complaint to the issuer of the related investment, Irish Life International, the Irish Financial Ombudsman or go through the Spanish equivalent of the Financial Services Compensation Scheme.

It is suggested in the Complaints Commissioner letter that the client was not aware of the difference between the IMD and the ISD.

The FSA website continued to show the firm as holding an IMD at the time of the complaint although this had been withdrawn in March 2010.

The Complaints Commissioner says: “I am particularly disappointed that this error occurred and the FSA is required to keep an up to date and precisely accurate register of those authorised to conduct regulatory activity. Likewise, given that you have been corresponding with a number of areas of the FSA for a considerable time, it is equally disappointing that the FSA itself did not identify this error which I find highly regrettable.”

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Comments

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  1. Christopher Lean 31st October 2012 at 9:54 am

    I think there appears to be a lot of confusion as to what an adviser with an IMD licence can advise upon.

    They can advise on life insurance and investment bonds.

    However, it seems to me that there is a grey area after the bond is established.

    Some think that any advice for the investments inside the bond can only be given by a MiFiD adviser and others seem to think that the IMD licence covers them to provide advice for investments held within the bond.

    If there is confusion amongst advisers, how will the clients understand this?

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