Rockingham Independent Limited (Rockingham) has been fined £35,000 after we found several failures resulting in 426 customers near or at retirement age being potentially exposed to the risk of receiving unsuitable investment advice.
We have also imposed partial prohibitions on its directors, Stephen Hunt and Jonathan Edwards, and a financial adviser, Gary Forster.
Unregulated collective investment schemes
Our investigation into the Peterborough-based firm found that 39 customers were advised to invest in unregulated collective investment schemes (UCIS), after the firm failed to understand the regulatory restriction on the promotion of these investments.
UCIS are complex investment opportunities which should only be proposed to certain limited categories of investors, such as sophisticated investors and high net worth individuals. These schemes must not be promoted to the general public in the UK.
The Retirement Income Tri-Investment Account
Rockingham also gave investors misleading descriptions of its pension draw down offering called the Retirement Income Tri-Investment Account (RITA), describing it as relatively low risk.
One of the underlying investments that customers were offered to invest within the RITA wrapper was the ARM Bond, investing in senior life settlement policies which did not give a capital guarantee.
Rockingham recommended the ARM Bond to ‘cautious’ to ‘moderately cautious’ customers and did not place restrictions on the amount placed in each underlying investment. So some customers had all of their investment placed in an ARM Bond, potentially leading to an inappropriate concentration of risk.
Rockingham has stopped selling any UCIS or structured products and has also agreed to conduct a past business review to determine whether any of the advised sales were unsuitable and whether any customer redress may be required.
What should you do next?
If you have concerns about advice you received from Rockingham you can contact its customer helpline on 01832 770460, or you may wish to seek independent financial advice on your options from another FSA-authorised firm.