Mis-selling

Investors who believe that they may have been given unsuitable or inappropriate advice/product recommendations can submit their portfolios or particular holdings for independent appraisal by us. 

The Consumer Protection Code obliges investment firms to obtain sufficient information on which to base advice and product recommendations which are suitable or appropriate to the needs and circumstances of that consumer.

Since the Markets in Financial Instruments Directive (“MiFID”) came into force in November 2007, many financial institutions have been subject to even more rigorous definitions in relation to suitability/appropriateness. Under the MiFID Conduct of Business Rules, providers must reasonably believe:

- the client has the necessary knowledge and experience to understand the risks involved

- the client is able to financially bear the investment risks (including actual losses or loss of access to funds) in the context of the investment objective/strategy of the client

- the transaction meets the financial objectives of the client

Appraisals in relation to suitability/appropriateness will be conducted on the basis of the recorded client information (known as the “Know Your Client” documentation) which the provider is obliged to make available. The question of mis-selling is quite separate from the scale of any loss incurred, though usually associated with losses. It should be noted that virtually all property transactions fall outside of the regulations protecting consumers.

Our appraisal could provide an objective basis on which an aggrieved investor would decide whether or not to seek redress. Any recourse should in the first instance be to the provider of the advice/ recommendation.

In the event that this does not achieve a satisfactory outcome, the majority of investors will be entitled to file a claim with the Financial Services Ombudsman.