MP refers to adjudicator’s baffling suggestion that firm should refuse financial advice rather than advise against an unsuitable investment

A Parliamentary debate on 8th Sept about fraud and financial scams, mentioned an interesting comment by a FOS adjudicator who is reported to have suggested that a financial adviser should have refused to advise a client to avoid a risky investment, suggesting instead that the adviser should have refused any advice.

“Some firms report to me the astonishing claim that some of our current systems work against responsible corporate behaviour. A partner in the financial consultancy firm Fairway wrote to me that the Financial Ombudsman Service was holding his firm accountable for losses incurred via some very risky, and frankly quite murky-sounding, investments that his firm had clearly warned its clients to avoid because they would put their life savings at risk. One adjudicator at the FOS had apparently suggested that the firm should have refused to advise the people involved. How can we have a system that makes it harder for people engaged in potentially problematic and risky investments to receive professional advice? It is essential for us to ensure that our regulators are focusing on the authors of dodgy investment schemes which blur the line between legitimate business and outright fraud, and not unfairly penalising those who try to help.”

Julian Knight MP.  House of Commons 8 Sept 2016

Read the whole debate here



Categories: FOS

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