Chase de Vere Independent Financial Advisers Limited (Chase de Vere) has been fined £560,000 by the FCA over the sale of Keydata products.
The FCA announced that between mid-2005 and mid-2009, Chase de Vere had nearly 3,000 clients who invested just over £49m in Keydata life settlement products. The FCA ruled that Chase de Vere’s advisers did not understand the risks posed to their clients, nor did the firm properly research the products. Key risk features of the Keydata products were therefore not disclosed to clients.
Some of the firm’s clients may not recover their full losses. Compensation has been paid via the Financial Services Compensation Scheme to eligible clients which was £48,000 per customer at the time. But, the majority of the 139 customers who invested a total of £4.4m over the scheme limit are unlikely to recover the full losses arising from their investments.
FCA director of enforcement and financial crime Tracey McDermott said: “Firms need to ensure that they fully understand and explain to customers the risks of investing in the products they are offering. That includes researching the products thoroughly before they decide to offer them and ensuring advisers have the tools they need to explain the risks to customers. Chase de Vere failed to do this, leaving its customers without a full understanding of the risks they were taking by investing their money in Keydata products.”
Chase de Vere settled early and received a 30% Stage 1 discount, reducing the fine from £800,000.