The Upper Tribunal has upheld the decision of the Financial Conduct Authority, the UK regulator, to fine Scottish firm Westwood Independent Financial Planners £100,000 ($161,000) for communications and suitability failings in relation to geared traded endowment policies.

The Upper Tribunal has upheld the decision of the Financial Conduct Authority, the UK regulator, to fine Scottish firm Westwood Independent Financial Planners £100,000 ($161,000) for communications and suitability failings in relation to geared traded endowment policies (GTEPs), according to an FCA statement.

The Tribunal agreed with the FCA that Westwood breached two of its principles for businesses and a range of FCA rules in relation to its sale of GTEPs. Often, Westwood would advise investors to remortgage their home to invest in GTEPs. 

It was found that Westwood had not taken reasonable care to ensure its recommendations to customers to invest in a GTEP plan were suitable, having regard to what it knew about those customers. Particularly, for all but one of the customer witnesses, Westwood had not provided information in a clear and fair way.

The action is an example of how the FCA is seeking to crack down on the sale and marketing of financial products it seems unsuitable for certain types of investor.

“[The information given to customers was] weighted towards the positive with insufficient emphasis and inadequate explanation of the risks so that, although it was not misleading, it was not clear and fair,” the Tribunal said.

Westwood no longer carries on any regulated activities, having been placed into sequestration (a Scottish term for bankruptcy) in October of 2011.

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