As a result, some retail consumers were recommended to switch their mainstream personal pensions into SIPPs (with underlying high risk assets) that may not have been suitable.
The act of providing regulated financial advice was passed on to unregulated third parties who were not only associated with the underlying assets but also represented themselves as the financial adviser firms.
No personal contact
The authorised financial adviser firms did not personally contact customers or review whether the recommendations were suitable before they were sent out, despite being ultimately responsible for the advice provided.
Some financial adviser firms and associated individuals have been referred to the FCA’s Enforcement Division, for potentially breaching the regulator’s requirements on the provision of financial advice.
Any adviser delegating advice to a non-regulated firm is endangering their clients, their own firms, and the wider community via the Financial Services Compensation Scheme (FSCS).”
Endangering
For Garry Heath, director general of adviser trade association Libertatem: “Any adviser delegating advice to a non-regulated firm is endangering their clients, their own firms, and the wider community via the Financial Services Compensation Scheme (FSCS).”
The only exception for Heath would be a firm that outsource to a software firm “but takes responsibility for the end result”.
