The FSA has published the latest findings from its most recent thematic work reviewing the sales practices used by smaller stockbroking firms when they recommend higher risk shares to customers. The FSA's aim is to review such practices and ensure that firms are treating their customers fairly. The three key findings that the FSA has found so far are:

  • When recommending small cap shares firms failed to provide relevant information to customers about the shares. For example, specific risk information was omitted and/or potentially inaccurate and misleading information was provided or statements were made which undermined and detracted from the higher risks and the longer term nature of the shares.
  • Firms have targeted and sold higher risk shares to customers when they did not have sufficient information to determine whether the shares were suitable for the financial and personal circumstances of customers.
  • Firms have used sales methods that were inappropriate and have pressurised customers into purchasing higher risk shares.

View Selling practices in smaller retail stockbrokers, 4 February 2008