Editorial: 'Caveat emptor' needs teeth again

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The FSA's proposal to implement a tougher 'buyer beware' on 'wider range' retail investment products, such has hedge funds and split-capital investment trusts, resurrects questions about the current value of ‘caveat emptor'.

The concept of ‘buyer beware’ has always been present in the financial services industry but many intermediaries would argue its strength and meaning has been watered down so severely consumers are now able to argue they didn’t know what they were signing up to, even when they have anecdotal evidence to prove they knew EXACTLY what they were investing in. Discussions with intermediaries frequently reveal cases where compensation has been paid to individuals when they claimed mis-selling because investment values fell and they were unhappy the investment had lost money. One such conver...

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