The FSA has censured a product provider and adviser of geared traded endowment policies (GTEPs) for breaches of Principles 7 (Communications with clients) and 9 (Customers: relationships of confidence). Following the firm’s voluntary liquidation, the FSA has instructed its liquidator to write to GTEP customers to inform them that they may be entitled to make a claim to the Financial Services Compensation Scheme regarding the suitability of the firm’s advice. The FSA waived a fine of £350,000 in order to preserve any remaining funds to meet customer claims.
In relation to the firm’s sales of GTEPs, the firm had failed to communicate adequately why the GTEP product was suitable for its customers or the risks associated with it and gather sufficient information to demonstrate that their customers' attitudes to risk were aligned with the product. In relation to the promotional materials produced by the firm and circulated to a network of IFAs as product provider, the material failed to explain the product clearly or provide balanced information regarding the product’s risks, which may have contributed to IFAs advising customers to purchase a product which may not have been suitable.
ViewIntegrity Financial Solutions Limited (in liquidation),12 May 2010