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Now FSA swoops with split-cap probe for IFAs

The FSA is investigating whether IFAs missold split-caps in a series of on-site checks as part of its wider research into the reasons behind the sector&#39s problems.

Following weeks of inquiry into the role of the”magic circle” of providers in the crisis, the FSA has switched focus to IFAs to see if there is any substance to claims that investors were missold policies by advisers.

The move comes as the Financial Ombudsman Service says it is receiving a “trickle” of complaints from investors about IFA advice and key features documents which classify zero shares as low risk.

As the requirements for key features documents are laid down by the regulator, IFAs believe the FSA will find it much more difficult to establish misselling than was the case with the pension review. They say they had every reason to believe they could trust the risk classifications attached to the shares and were appalled when some clients lost up to 95 per cent of their investment in nine months.

Emery (IFA) Associates partner Peter Emery says: “It is clear the error lies between the regulator and the product providers and has nothing to do with advisers. I would hope that the regulator concludes that an adviser selling a regulated product classified as low risk cannot be accused of misselling.”

FSA spokeswoman Jackie Blyth says: “The review is to see if there is evidence of misselling through all outlets. As a regulator, we do not say what is high, low or medium risk.”


Why CP121 is no laughing matter

One of my favourite Morecambe & Wise shows involved conductor Andre Previn, where Eric Morecambe was the pianist.I was reminded of this as I finished my response to CP121. On this occasion, the FSA has eagerly embraced new technology by allowing submissions using a form on its website.This is all very well but it does […]

Utopia Inns back for more

Utopia Inns is offering a second share subscription in its enterprise investment scheme (EIS). This EIS aims to provide capital growth by developing pubs initially around the M5 area between Birmingham and Bristol and the M25 area towards London.The first share offering in August 2001 raised £750,000, which was used to develop a champagne piano […]

Experts fear NI rise will kill off stakeholder compulsion

Chancellor Gordon Brown&#39s rise in National Insurance contributions could make stakeholder compulsion a non-starter, according to pension experts.They believe the chances of making stakeholder compulsory have plummeted now that NICs have been raised by 1 per cent for both employers and employees as they think many will see pension compulsion as a tax too far.NICs […]

Product Matters

Threadneedle is clearly hoping to attract a broader investment audience for its property unit trust by relocating the former Sackville Property Unit Trust offshore to Jersey.It is hoping the fund will appeal to IFAs, as witnessed by the minimum investment subscription of £25,000 for IFA clients, with £250,000 required from direct investors.Threadneedle&#39s property fund has […]

Recording sickness absence cover - thumbnail

White paper — recording sickness absence

The latest figures from the Department for Work and Pensions illustrate that sickness absence is still a major cost to businesses, with an annual bill for sick pay and associated costs to employers of £9bn. This paper from Jelf Employee Benefits looks at the importance of recording sickness absence for any employee health strategy and how this can be carried out in an efficient manner to reduce absence, improve employee engagement and drive up profits.


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