The Financial Services Authority (FSA) of UK has publicly censured The Garrison Finance Centre for failing to communicate clearly the risks of complex investment products - geared traded endowment policies (GTEPs) – to its customers.

Garrison, a financial advisory firm based in Richmond, North Yorkshire, is in liquidation so the FSA has instructed the liquidator to write to the firm’s GTEP customers informing them they may have received unsuitable advice and could be entitled to make a claim. The FSA has waived the GBP35,000 fine it would have imposed so that the money can be used to meet customer claims.

According to FSA, Garrison failed to: communicate adequately why a GTEP was suitable for a customer and the risks associated with it; demonstrate why its recommendations were suitable as it did not gather and/or document adequate information to support its recommendations; and show that customers’ attitude to risk was commensurate with the GTEP’s risk profile.

Margaret Cole, director of enforcement and financial crime at FSA, said: “Geared traded endowment policies are complex investment products with significant risks attached to them. Garrison failed to make this clear to its customers so many of them may have received unsuitable advice. It’s for this reason that we’re censuring the firm. We would have also fined them but decided the money would be best served meeting any compensation claims.”