ENSURING SALES FORCES PROVIDE BEST ADVICE
| Published date | 01 March 1993 |
| DOI | https://doi.org/10.1108/eb024792 |
| Pages | 42-47 |
| Date | 01 March 1993 |
| Author | DAVID NICHOLLS |
| Subject Matter | Accounting & finance |
ENSURING SALES FORCES PROVIDE BEST ADVICE
Received: 10th November, 1993
DAVID NICHOLLS
DAVID NICHOLLS
IS
ONE OF THE SENIOR ENFORCEMENT
OFFICERS OF THE LIFE ASSURANCE AND UNIT
TRUST REGULATORY AUTHORITY (LAUTRO)
WHICH IS A RECOGNISED SELF REGULATING
ORGANISATION ESTABLISHED UNDER THE
FINANCIAL SERVICES ACT 1986. HE IS
RESPONSIBLE FOR THE DAY-TO-DAY
MONITORING BY ENFORCEMENT STAFF OF TOE
MARKETING ACTIVITIES OF OVER 100 LAUTRO
MEMBERS. A FELLOW OF THE CHARTERED
INSURANCE INSTITUTE, HE HAS BEEN
EMPLOYED BY LAUTRO SINCE MARCH 1988.
ABSTRACT
The purpose
of
this paper
is to explain the
standards
required
of
saleforces
under the
Lautro Rules when giving advice; to
explore how
and
why these standards
have
not always
been
achieved;
and to
discuss
ways in
which
Lautro
members
can
estab-
lish and maintain
procedures
to
maximise
investor protections.
The views
expressed
are those of the
author
himself and not
necessarily those of
Lautro.
BACKGROUND
The Financial Services Act 1986 (the
Act) provides for the Secretary of
State to makes rules regulating the
conduct of investment business.1
These are delegated in practice to
the Securities and Investment Board
(SIB),
self-regulating organisations
(SROs) and recognised professional
bodies.
The SIB conduct of business rules
make reference2 to 'best advice' in
the context of the recommendation
of suitable life policies and units in
collective investment schemes.
Schedule 2 of the Lautro rules mir-
rors the SIB rules and contains the
Code of Conduct for members and
their company representatives. The
members' salespeople are such com-
pany representatives, being defined3
as individuals who are appointed to
procure, or endeavour to procure,
the sale to investors of the member's
investment contracts and/or to
advise investors (whether orally or in
writing) on the merits of individual
investment contracts, on the exercise
of rights under investment contracts
or on whether or not to surrender
policies.
42
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