RSM Tenon fined £700k over structured product sales 'flaws'

FYI

fascinating!

Gosh... it's website proudly announces that RSM Tenonare one of a very few Chartered firms - see CII for details. The hole seems to have dropped out of this particular bucket this week- a poisen chalice ?

.

Well spotted Mr Melville. But surely, according to one of the central pillars of the RDR, once we're all chartered or well on the way there, we'll have a professionally perfect industry and none of these sorts of things will ever happen again?

Errr, somehow things don't actually work that way in practice, do they?

Goodness knows what Tenon did wrong, but Lehman's were AAA rated, so in the eyes of the ratings agencies - and who are we to second guess them when governments themselves rely on these august bodies - Lehman's were as reliable as UK PLC.

So, yet again the FSA are going back and judging yesterday's advice in light of today's knowledge.

They aren't even closing the door after the horse has bolted.

Interesting to note; on the same day, the FOS released figures showing that 65% of the 8,800 complaints agains Barclays were upheld in favour of the client.

Good to see the FSA getting their priorities in the right order as always...

Even the FSA I would hope would have to accept that the name is irrelevant and in fact mentioning a name may distort the advice from the adviser or the willingness of a client to act on that advice.

The rating (if we are ever to trust rating agencies again and I e little choice but to rely to some extent on ratings as we do with OEIC and other funds)

The Name only becomes relevant when ensuring a broad spread and teh principle holds true with banks too i.e. if you sell your house or business for say £600k and don't buy immediately our firms advice is now to make sure if the monies are going to a solicitors client account, you knwo WHICH banks PLURAL. We as a firm check with our Platform providers how they handle cash, Transact for instance split 4 banks way automatically. Since the banking crisis, if we do consider any structured products, then we compare the counterparty against any other relationships the client has with the counterparty (i.e. a lot recently had RBS, Barclays or Lloyds as counterparty so if the client banks with them too, that becomes relevant....)

Th interesting thing is if the fine was £700k, how much is the compensation or PI bill likely to be?

Up until the banking collapse, the FSA seemed to like structured products. Funny how it's all changed.

All very diverting I'm sure, but what I really want to know is this:

This is yet another fine levied. I don't know how much has been raked in over (say) the last 12 months, but how is it accounted for?

Does it appear in the FSA accounts? I haven't found it if it does. So where does the money go? To pay bonuses?

I know where it SHOULD go - to reduce the fees of those advisers who haven't been fined (or found out?) and who invariably have to pay for those who are less fastidious.

Perhaps someone or some journal that has the time and inclination could raise the question under the Freedom of Info Act?

I'm sure we'd all like to know.

They also like etfs,its in the rdr..talk about counter party risks

Maybe the FSA should fine itself and charge this out to the IFAs it regulates and failed to protect. It was the FSA that failed to treat IFA customers fairly in its approval of Lehman-backed investment plans. It was the FSA that did not asses the risk of structured products or the banks and it was the FSA that said and did nothing in the credit boom!

The Charterred status of Tenon has done nothing to protect Tenon or its customers and likewise RDR will do nothing to protect the consumer from the all powerful "do as I say not as I do" regulator.

Yeah. It's a joke.

My old firm decided to close this year. We didn't renew our 'corporate chartered' status. Yet I see we appeared on the list they released the other week...

Maybe it's because we said we would adopt a 'diversity policy' in line with CII's Code of Ethics? (Clearly, that'll help any client getting advice on complex products?)

Whilst FSA has certainly shown its usual 20:20 vision, its pertinent to note that a key failing of Tenon was a basic lack of factfinding: "Information that the firm failed to record included the customer’s annual income, investment timescale, existing savings, existing investment portfolio and liabilities;"

You will have spotted much the same criticism at the heart of yesterday's notices against Park Row: "due to the inadequate recording of customers’ personal and financial information...it was not possible for Mr Sprung to demonstrate that Park Row advisers had considered the interests of its customers"

Sometimes, we all appear to lose sight of the basics - and leave ourselves open.

Hi Phil

"The population of Lehman-backed Structured Products which may be subject to redress is estimated to be £1.8 million"

No reference to redress costs of the other Past Business Reviews (e.g. other structured products or pensions switching), though these should be less prone to redress.

Revenues are cited as having been £262k in respect of structured products and £3.2m in respect of pensions switching.

Anyone noticed your PI premiums going up recently? And questions about pensions switching and structured products appearing on your renewal docs?

The fines levied against any firm are allocated to the sector(s) in which the fined firm operated and thus work to reduce the overall FSA fees by being a credit to the budgeted income for that sector - it's only a shame that it doesn't go anywhere near offsetting the FSCS liability for firms still trading.