2.2 Integrity failed to pay due regard to the information needs of its clientsfailing to record adequately why the GTEP product was the most suitable product for the client.
2.4 Integrity in its role as product provider failed to ensure that its GTEP promotional material was drafted in compliance with the requirement to be clear, fair and not misleading, in contravention of Principle 7 by:
failing to ensure that the GTEP promotional material, particularly its earliest brochures, that were provided to IFAs and subsequently to clients explained the product in a manner that was clear, fair and not misleading;
failing to give the IFAs sufficiently balanced information in relation to the risks of the GTEP product. This contributed to IFAs advising clients to purchase a GTEP product that was potentially unsuitable considering their individual circumstances, also breaching COB 3.8.8.R; and
not ensuring that Integrity clearly and consistently communicatedto to IFAs the appropriate risk rating to be attached to the GTEP product.
2.5 Integrity’s failures are regarded by the FSA to be serious for the following reasons:
as product provider, the lack of a balanced explanation of the risks of GTEPs in its brochures may have contributed to IFAs advising clients to purchase GTEPs that were unsuitable to their individual circumstances; and a significant proportion of Integrity’s direct GTEP sales reviewed by the FSA consisted of clients who had raised the capital for the investment by re- mortgaging their primary residence.
Failing to demonstrate adequately the suitability of the product is more serious when the security used for the investment loan is the family home as the impact on clients is potentially the
loss of this home.
Katrina Stamp
Is now Group Operations Director at Vitesse PLC, her CV is here
linkedin.com/pub/katrina-stamp/9a/a40/7b1?trk=biz_employee_pub