The Complaints Commissioner has rejected a complaint from a consumer that the Financial Services Authority (FSA) failed to adequately monitor his financial adviser, who he claimed had given him unsuitable advice.
The complainant claimed to have lost a "considerable amount of money" as a result of the failures, pointing out the adviser's poor record keeping and working practices.
However, rejecting the allegations, Complaints Commissioner Sir Anthony Holland said the complainant had failed to present evidence to show that the losses incurred were the result of supervisory failures, rather than poor investment performance.
He said: "I must point out that the use of a financial adviser to make an investment does not guarantee (my emphasis) that investment decisions will result in a gain or profit for the investor."
Holland also noted that the performance of the complainants' pension arrangement was responsibly of professional fund managers working for asset managers, rather than the adviser.
Although the complainant suggested that, if the FSA's supervision had been appropriate it would have noticed the failure to meet the ‘know your client' rules, Holland also noted the practicalities of the situation.
"From the information presented to me it appears that based on the information the FSA held, your financial adviser was deemed to be what was described as a ‘low impact firm'," he said.
"As such, it was not being specifically monitored by the FSA and was supervised and monitored by the FSA's Small Firms and Contact Division and, given the low risk it posed, did not have a specific or designated supervisor."
With the financial adviser now out of business, Holland recommended that the complainant should refer the matter to the Financial Services Compensation Scheme (FSCS) if they feel they were given incorrect advice.
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