The Westwood Upper Tribunal decision
By Adam Samuel, Wolters Kluwer Financial Service’s contributor.
On 22 November 2013, the Upper Tribunal published its decision rejecting Westwood Independent Financial Planners’ reference to them. The FSA had fined the firm £100,000 for misselling geared traded endowment policies. The significance of this case lies mainly in the Tribunal’s consideration of the effect of gearing on customer’s attitude to risk. The decision is interesting for its failure to grasp the fact that neither investments nor consumers actually have low, medium and high attitudes to risk. The Upper Tribunal also seems to be reviving the view expressed in the Legal & General case that in order to fine a firm for misselling to multiple customers, the regulator has to call each of the victims as witnesses. Strangely, though, after rejecting the regulator’s attempt to extrapolate wider implications from the small number of cases investigated in detail, the Upper Tribunal upheld the regulator’s decision and fine (although as ever without remembering the time value of money and so not adding an interest element). Read the full story »