Court dismisses judicial review application of FOS decision

The court has dismissed an application for judicial review by Full Circle Asset Management Ltd (FCAM), a firm of financial advisors, of a decision by FOS. FOS had upheld a complaint made by an FCAM’s client, Mrs King, who argued that FCAM had provided her with a portfolio of investments unsuitable for her. Mrs King had agreed to take on a medium level of risk in her portfolio. The portfolio presented to Mrs King had been subject to a skilled persons review (SPR) under section 166 FSMA 2000 when the then FSA had concerns over the firms’ compliance with COBS requirements on suitability. The SPR had concluded that the portfolio was of medium risk and FSA agreed the report. FCAM argued that FOS had re-characterised the complaint of Mrs King and turned it from a challenge about the riskiness of the portfolio into a complaint about the suitability of its offer to provide a discretionary investment service. The firm said FOS had not given proper weight to the SPR’s conclusions and the FSA’s acceptance that the portfolio was of medium risk. The court concluded that FOS was correct to determine that its role was to resolve whether the specific portfolio provided to Mrs King was suitable for her, taking into account her individual circumstances, despite her classification as a medium risk investor.

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