The Financial Conduct Authority says Sesame advisers sold Keydata products as “low risk” in 88 per cent of cases sampled by the regulator.
The FCA fined Sesame £6m today for failing to ensure investment advice was suitable and for failings in the systems and controls that governed the oversight of its appointed representatives.
Around £245,000 of the fine related to 426 sales of Keydata products.
The final notice shows that in each of the 17 cases reviewed by the regulator, clients were not made aware of the level of risk related to the products. In 15 cases, clients were told the products were low risk investments.
One 79-year-old client was advised to invest £139,000 into Keydata, amounting to 89 per cent of her savings, despite having a “very cautious” attitude to risk.
Another 58-year-old client was advised to invest £10,000 in Keydata despite being in receipt of disability benefits with an income shortfall of £600 per year when seeking advice.
The FCA’s final notice says: “The failings identified were particularly serious because many customers were advised to invest a substantial proportion of their available funds in Keydata.
“As a result, the impact of any unsuitable advice on customers was likely to be particularly significant.”