I am writing in reference to the story about the Fos censuring an adviser for an investment his client made of her own volition into Bulgarian property (FA, 10 December).
Given the information published, the decision made by Fos is blatantly ridiculous, and a terrible abuse of their powers.
Yes, the mortgage adviser in question shot himself in the foot twice: once by not assessing the suitability of the remortgage in line with FSA rules that applied at the time, and twice by not reporting the complaint to his PI insurers before he responded to the client.
Notwithstanding both of these points, shared responsibility for the failed Bulgarian investment lies with the IFA who recommended that scheme, as well as with the client who was potentially complicit in mortgage fraud (if she maintains the position that her income was inflated in the Halifax mortgage application).
A mortgage adviser cannot and should not be held responsible for how a client chooses to spend monies raised through a remortgage unless he/she also has a hand in any follow-on transaction, period.
I would strongly recommend that the mortgage adviser/EMS fight this case all the way.
If he has legal expenses cover on his home or business insurance, this may assist him in footing the legal bill. He may also still want to lean on his PI insurer for support even if it has already declined the case as it would also be in its long-term strategic interest for this decision to be overturned, as it sets a very dangerous judicial precedent.
This is a clear example of why it is useful for the adviser community to have third party compliance support as well as industry trade union membership.
Andy Adewale
Head of regulatory matters,
VN Direct,
Aylsford,
Kent
