The Financial Services Authority (FSA) publicly censures today The Garrison Finance Centre Ltd. (Garrison) for its failure to communicate clearly the risks involved in Geared Traded Endowment Policies (GTEPs) to their customers. Not only that. The FSA also rebukes Garrison for failing to support its recommendations given to customers by adequate background information and to show that the customers’ attitude of risk is commensurate with the GTEP’s risk profile.
From the evidence gathered by FSA, Garrison sent out insufficient advice to customers regarding the risks involved in GTEPs such that a number of them even re-mortgaged their homes just so they could purchase GTEPs. Only one customer was warned that further capital injections could be required to support the GTEP should it under-perform.
By this public censure, FSA wants to remind financial groups of their bounden duty to sufficiently inform their customers about the risks involved in complex investment products and to treat their clients fairly in the distribution of these data and information. This is the second GTEP-case that FSA has published this year.