View more on these topics

Only 12% of sales involved suitable advice, says FSA

The FSA says just 12 per cent of Arch cru sales were found to involve suitable advice based on an external file review of a small number of cases.

The regulator published a consultation paper this week on plans to implement a £110m consumer redress scheme for between 15,000 and 20,000 Arch cru investors.

Firms will be required to assess whether recommendations to invest in Arch cru were suitable and, if not, pay redress.

The FSA is looking to impose the redress scheme based on the results of the external file review.

The regulator says it has identified 795 firms it believes sold Arch cru funds.

A sample of 24 firms was drawn from the total, with 179 files reviewed from those firms to assess the suitability of the advice given.

The results showed 12 per cent, or 22 sales, of the files reviewed were found to be suitable. A further 10 per cent, or 17 sales, were rated as unclear while in 78 per cent of cases, or 140 sales, the advice was found to be unsuitable.

Of the 24 firms reviewed, 19 had missold in at least half of their reviewed sales.

Of the 22 sales that were deemed suitable, 14 of these came from two firms.

The FSA says: “We believe the file review exercise clearly demonstrates a high level of unsuitable advice and inadequate disclosure by the firms reviewed as well as a lack of apparent due diligence conducted into the Arch cru funds.”


MPs launch corporate governance and pay inquiry

The Treasury select committee is to look at the role boards, shareholders and non-executives play in financial services institutions as part of an inquiry into corporate governance and remuneration in the sector. The inquiry’s terms of reference say it will look at the type of corporate culture financial services firms should try to foster and […]

Omam plans investment arms merger

Old Mutual plans to merge investment arms Old Mutual Asset Managers and Skandia Investment Group. Omam UK chief executive Julian Ide has been appointed chief executive of the combined business with immediate effect, reporting to Old Mutual chief executive of asset management for the long-term savings division Paul Feeney. Skandia chief investment officer James Millard […]

SVR hikes will cost mortgage borrowers £300m, says Which?

The recent spate of standard variable rate hikes will cost consumers an additional £300m in mortgage repayments over the next year, according to Which?. Co-operative Bank, Halifax and Clydesdale and Yorkshire Banks all increase their SVRs today. The Co-operative Bank is raising its standard variable mortgage rate by 0.5 per cent, from 4.24 per cent […]

Fitch: Solvency II will pull rug from under securitisation recovery

Solvency II risks damaging the recovery of the European securitisation market and further undermining the ability of banks to lend, according to the credit ratings agency Fitch. Solvency II sets out rules for how much capital insurers have to hold against various assets depending on their risk and duration. In a new report, Fitch estimates […]

Global income: preparing for a rate rise…

In the five years since we launched the Artemis Global Income Fund, its manager Jacob de Tusch-Lec has built a distinctive portfolio that is first among its peers. Here he explains why his “quality, cyclical and value yield” stocks, and flexible approach, leave the fund better placed to benefit from uncertainty than funds that depend […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm