You can’t have failed to notice the recent headlines concerning the misdemeanours of the banking and financial industries. First we had the mis-selling of payment protection insurance which led to banks setting aside billions of pounds to compensate customers. This was followed by the recent libor scandal concerning the artificial setting of interest rates, and now the FSA is set to target the mis-selling of UCIS. According to the Financial Services Authority, their own investigations have uncovered ‘high levels’ of unsuitable advice being given on such investments.
A UCIS (Un-regulated Collective Investment Scheme) is an investment scheme that is not authorised by the FSA and as such, falls outside of their compensation scheme. UCIS investments include crops, fine wines, property schemes and traded life policy investments and is worth an estimated £2.5 billion in the UK. The lack of protection from the FSA compensation scheme makes UCIS investments risky and as such, those promoting or selling such products have a duty to ensure that such schemes are only recommended to sophisticated investors and high worth net individuals, for whom the products are suitable.
Recently however, the FSA has become aware of high levels of unsuitable advice and the promotion of such products to ‘ordinary investors’.
There have been recent examples where the FSA have banned the directors of Independent Financial Advising firms (IFA’s) over UCIS promotion.
Farleys Solicitors LLP have recently acted for a number of high worth net individuals, in particular sports stars, and have successfully mounted actions against Independent Financial Advisors for the mis-selling of UCIS products. If you think you may have been mis-sold such a product please don’t hesitate to contact one of our professional negligence solicitors to discuss whether you may have a claim.
By Daniel Draper, Commercial Litigation Solicitor