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TBO Investments Limited fined £28k for documentation failings

The FSA has fined TBO Investments Limited £28,000 for failing to clearly document the explanations it gave to clients concerning the risks of their transactions.

The regulator says it also failed to make and retain records that demonstrate the suitability of its advice and ensure that its business is conducted in accordance with FSA requirements.

Between December 2001 and October 2007, TBO failed to obtain and retain sufficient information about customers’ personal and financial circumstances and objectives, leading to an unacceptable risk of unsuitable investment advice being provided to TBO’s customers.

It also failed to issue suitability letters that consistently explained why the relevant transaction was suitable for the customer in question.

TBO did not adequately supervise and monitor staff providing advice to customers and failed to arrange adequate systems and controls in relation to trust signatures.

FSA head of retail enforcement Jonathan Phelan says: “Obtaining and clearly recording enough information from customers to ensure the advice given is suitable is an important part of treating them fairly, particularly in areas such as long-term savings and pensions, where the wrong decisions could lead to hardship in retirement. Where we have concerns about the quality of the advice given, we will require firms to undertake reviews of past business, often at considerable cost to them, to identify and remedy any unsuitable advice.”

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