FSA strikes back on Lehman structured products - 14 September 2009: "If the client was misled as to the level of risk they were taking on, for example through the marketing literature of plans, they will potentially have some recourse.
However, some of the 6,000 clients will have invested with full knowledge of the risk they were accepting and here the adviser or the provider should not be held responsible for the client’s losses. But there is concern the FSA and Financial Ombudsman Service may not see things this way."
If someone was led to believe that there was no risk whatsoever it is arguable that they were misled. However, there is no such thing as a 100% guaranteed and risk free investment so any adviser worth his/her salt would not give such unfounded assurances, not even National savings is 100% safe. The problem lies with the FSA assuming all clients (not consumers) are in line for some compensation, is this a vote winner for politicians? Added to this is the unreasonable way the FOS automatically assumes guilt and then applies a fictitious deposit account which pays an impossible ammouint of interest when calculating redress.
Will the industry stand up to the politically influenced regulator?