The Financial Services Authority (FSA) has censured an advisory firm for failing to explain the risks of complex geared traded endowment policies to customers.

North Yorkshire-based advisory firm The Garrison Finance Centre was censured for failing to communicate the risks of geared traded endowment policies.

Margaret Cole, director of enforcement and financial crime at the FSA, said the failings were particularly serious as a number of customers had remortgaged their homes to buy the policies.

She said, ‘Geared traded endowment policies are complex investment products with significant risks attached to them.

‘Garrison failed to make this clear to its customers so many of them may have received unsuitable advice.’

Cole added, ‘We would have also fined them but decided the money would be best served meeting any compensation claims.’

The firm is currently in liquidation and has had its £35,000 fine waived by the regulator, but has instructed liquidators to write to customers informing them that they may have received unsuitable advice and could be entitled to make a claim.

The FSA sees the failings as particularly serious because a number of customers re-mortgaged their homes to purchase a GTEP following advice from Garrison.