How not to sell a fund: UBS's AIG failings revealed

TCF

Today the Financial Services Authority (FSA) revealed that UBS demonstrated significant failings in the sale of the AIG Enhanced Variable Rate fund between 2003 and 2008, and fined the bank £9.45m. But where did it all go wrong? IFAonline details the eight ways UBS failed its customers.

1. Due diligence UBS failed to conduct adequate due diligence on the fund before selling it to customers, the FSA said. As a result, the bank had insufficient understanding of the nature of the assets in the fund and the consequent risks associated with it. Furthermore, between January 2004 and August 2007, UBS failed to monitor effectively the asset composition of the fund. 2. Sales process The regulator said UBS failed to have an adequate sales process in place for the fund. UBS's advisers were not provided with adequate training on the fund, nor its features and risks. As a ...