Fimbra says critical study will not be published

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The Independent Online
THE Securities and Investments Board has confirmed that Fimbra, the regulator for independent financial advisers, had submitted a report on West Bromwich Building Society's involvement in home income plans but denied allegations that the report had been suppressed because it criticised SIB inaction.

Fimbra's report on the building society's role said its literature on home income plans was misleading and its schemes below standard.

West Bromwich Building Society - whose investment activities are the responsibility of Sibro, the SIB's direct regulatory arm - marketed home income plans for which it provided the mortgages through financial adviser Fisher Prew Smith. This firm was suspended by Fimbra in 1991 and went out of business.

Critics said the SIB should have taken action over West Bromwich Building Society at the time of Fimbra's action.

A Fimbra statement said that 'the material remains confidential between regulators and there is no question of the report being published'.

Lynne Jones, Labour MP for Birmingham Selly Oak, said the SIB had not replied to concerns she had raised earlier about West Bromwich Building Society. She and other MPs will take up the matter with Anthony Nelson, the Treasury minister responsible for financial regulation.

Home income plans, marketed from the late 1980s, were especially unsuitable for many elderly investors targeted by financial advisers. Compensation to misadvised investors is likely to reach pounds 50m.

The High Court ruled yesterday in a case involving the SIB and Melton Medes, a trading conglomerate, that the SIB cannot be sued for damages for disclosing restricted information obtained from individuals.