FSA has fined Care Asset Management Limited (Care), an independent financial adviser, £56,000 in relation to the distribution of Keydata products. Care failed to provide suitable advice for the following reasons:

  • it incorrectly rated the products as lower risk, despite the fact that many of the Keydata products had characteristics of other products with higher risk rating;
  • it did not communicate the risks clearly and in a balanced way to consumers;
  • it did not understand its customers’ risk appetite; and
  • it did not monitor or review adequately the sale of Keydata products.

Care mitigated the seriousness of the failings by assisting customers to obtain redress through the Financial Services Compensation Scheme (FSCS), improving its sales processes and appointing an external consultant to update compliance arrangements and review future sales. (Source: Final Notice Care)