FSA issues warning over Connaught funds
The FSA has issued a warning to people who have invested in two funds from Connaught Asset Management because it believes the way they have been advertised could be misleading.
The Series 1 and 2 income funds are described as “very low risk” and “low risk” in product literature, making comparisons between investing in them and placing money in a high street or building society bank account.
The FSA also says the product literature does not explain clearly enough that the quarterly “fixed income payment” they offer depends on the performance of the investments within the funds.
It says investors should contact a financial adviser or stockbroker to understand how the funds work and what this means for their money.
Mike Davies, the chairman of Connaught, says the firm supports the role of the FSA in protecting the consumer and welcomes the feedback on its fund documentation. “Connaught has always taken the clear disclosure of risk as well as benefits very seriously and to this end engaged the services of specialist legal advisers to review its documentation and processes before the launch of each fund,” Davies says.
“We firmly believe that all financial advisers have sufficient information within our documentation and from the series of seminars we ran recently to ensure they can advise appropriately on our products.”
Davies says the firm will be conducting a further review of its documentation immediately. “We encourage all financial advisers to engage with us before using our products, or in the after sales environment,” he says.
Note: This story was updated at 4:01pm
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