Asset allocation in investment

7.2 Investment advice in practice

This activity looks at investment advice in practice and how it may not be as good as the templates seem to suggest.

Activity 14 Examples of poor investment advice

Allow around 30 minutes for the readings and activity that follows.

Read the letter from the FSA to CEOs of wealth management firms in 2011.

Read the press release and commentary on Bank Santander’s £12.4m fine for not following ‘know your customer’ rules and mis-selling investment products as a result.

The FSA identified significant problems in a number of wealth management firms in 2011 and the CEOs of these firms were warned of this by the FSA. And yet, Bank Santander failed to act on the warning which led to a £12.4 million fine by the FCA in 2014.

What were the main problems with Santander Bank’s advice to clients?

Select the correct answers from the options below.