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FSA unveils redress scheme for Arch Cru investors
by Emma Dunkley on Dec 17, 2012 at 10:53
The Financial Services Authority has said firms who advised on investments in the CF Arch Cru Investment and Diversified funds must contact all clients to see if they were mis-sold the funds and are eligible for redress.
The watchdog said if clients opt for a case review and receive redress, it will put them ‘back into the position they would have been in had they received suitable advice.’
The FSA said it is the first time it has used its statutory consumer redress power to implement a scheme of this type.
The regulaor said there was evidence of widespread mis-selling by firms who failed to assess the funds as high risk despite the fact that the funds were typically invested in non-mainstream assets such as private equity, private finance and commodities.
Clive Adamson, FSA director of supervision, said: ‘Advisers have to accept and understand that ultimately they are responsible for making sure their customers’ interests are protected. If they don’t understand a product or haven’t done the due diligence on it, they are in no position to recommend it to their customers.
‘It is important that when mis-selling occurs that consumers can be redressed. The vast majority of advisers maintain very high standards and mis-selling by a few only further erode trust in the market which harms the whole sector.’
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