Case Studies Shows How Sensibly FOS Reviews Investment Complaints

I have just read a very elegant summary of seven case studies published by FOS. Each explored whether product recommendations were consistent with the articulated needs and circumstances of the client. In five cases the complaints were upheld. In two they were rejected.

Here you can read the case studies

FOS say they were chosen specifically to illustrate how they typically calculate redress – which is why, they argue, most of the cases here are “complaint upheld”. The case studies show that when deciding on a fair benchmark, FOS will look carefully at a consumer’s individual circumstances – and what they had wanted when they first took out the investment.

What additional lessons did they share:

Keep detailed records of what was discussed with the client, what was done and why.
The investment recommendation must have some likelihood of delivering returns consistent with the clients needs and expectations.
If the investment recommendation is inconsistent with the client’s attitude to risk then there should be an explanation of why.

What impressed particularly is the use of simple English, there wasn’t a trace of legalese.
The judgements are largely consistent with my interpretation of the FCA’s March 2013 Guidance on Investment Suitability and fit comfortably within the broad parameters of the Five Proofs summarised in an Adviser Lounge blog published earlier this year. This can be read here

I am often derided for being overly complimentary to the clarity of intent shown by UK regulators compared to those in other jurisdictions in which I work. What have I misinterpreted here?

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2 thoughts on “Case Studies Shows How Sensibly FOS Reviews Investment Complaints

  • For those of you anxiously searching for the FCA’s March 2013 Suitability Guidance, I was actually referring to the FSA’s March 2011 paper. Aberrant thinking probably caused by cricket anxieties. Well based in retrospect.

    Reply
  • For those of you anxiously searching for the FCA’s March 2013 Suitability Guidance, I was actually referring to the FSA’s March 2011 paper. Aberrant thinking probably caused by cricket anxieties. Well based in retrospect.

    Reply

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