Is the FSA looking at firms investment strategies as well as mis-selling?
Whether a policy is suitable relates to the advice given and whether it was appropriate for that individual. It might have been suitable but not have performed as well as expected – poor investment performance is not in itself an indication of mis-selling. Principles 2 and 9 of our Principles for Businesses set out that: • A firm must conduct its business with due skill, care and diligence. • A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgement. Though investment strategies are mainly a matter for firms’ commercial judgement, they are constrained by the capital and other prudential requirements we impose on firms. In the last few years we have strengthened the obligations and independence of actuaries within insurance firms to test and challenge management’s investment strategies, and required insurance firms to set out the Principles and Practices of Financial Management (PPFM)
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- Is the FSA looking at firms investment strategies as well as mis-selling?
