According to the regulator, Baronworth’s financial promotions failed to comply with regulatory standards as “they were not fair, clear and not misleading”. The firm’s business model relied on posting out financial promotions for a variety of its high income products to its customers on a direct offer and non-advised basis.
The firm’s promotions tended to emphasise the potential benefits of the proposed investments without giving equal prominence to their consequent risks. They also failed to set out charges that would be incurred by the customer in clear terms.
In addition, Baronworth was found to have inappropriately handled complaints – many of which stemmed from the promotion of its Eurolife Secured Bond ISA.
The FSA wanted to hit the firm with a penalty of £50,000 but this was reduced to nil because the company went into liquidation. The watchdog said any funds remaining in the company should be used to to meet claims by creditors, including any customer claims or from the Financial Services Compensation Scheme.
Jackson, often quoted by the financial trade and national press, was banned from performing any significant influence function other than as or through an appointed representative.
The FSA said Jackson, who was solely responsible for drafting and approving the firm’s direct offer financial promotions, is “not a fit and proper person because he lacks competence and capability” to perform significant influence functions.
Bill Sillett, head of retail enforcement at the FSA, said: “This particular case emphasises the need for authorised firms and approved persons to ensure their financial promotions are clear, fair and not misleading, especially when they are carried out on a direct offer or non-advised basis.
“This is particularly important to ensure non-advisory firms are compliant with the recent changes brought in by the RDR.”
