The FSA recently charged a Glasgow-based small-cap share broker £101,500 for irresponsible and ‘potentially misleading’ sales tactics.
It’s obvious that this firm was not using any form of learning management system (lms) to ensure their employees’ and representatives’ compliance with FSA regulations.
And this isn’t the only case of a penny-share broker being fined of late.
Wills & Co were criticised for failing to improve their compliance procedures with regards to their sales practices and, had they not been winding down, would have faced a £1.5 million fine for their irresponsibility.
The small-cap stock broking sector is experiencing a tightening of regulatory requirements of late due to the need to drive up customer treatment standards after a number of complaints with regards to investment suitability and advice.
It seems penny-share brokers are being accused of putting profit before customers by aggressively marketing volatile, low-priced securities without first assessing their suitability with regards their clients’ investment objectives.
Now, the FSA are out to make examples of firms that show a blatant disregard for these regulations, hoping this will serve as a distinct warning to similar firms and encourage them to keep a closer eye on what their appointed representatives are doing.
Had these firms been using Cobent’s learning management system (lms), it would be reasonable to assume that they would have avoided enforcement action from the FSA.
Employees and representatives would have been presented with purpose-built learning materials across the entire learning continuum, ran through the training process promptly and effectively, and signed off by their supervisor.
In fact, even if the FSA decided to investigate a firm using Cobent’s learning management system (lms), the firm would have credible audit trails and e-signatures that prove they did everything within their power to enforce and encourage the use of proper sales tactics and techniques amongst their employees and representatives – thus providing a strong foundation of legal evidence should the matter have been taken further.
Now, consider the ROI on Cobent’s learning management system (lms) when you think about the hefty £101,500 fine imposed on the Glasgow-based small-cap share broker. Had this firm implemented Cobent’s learning management system (lms) before the FSA began their investigation, they most probably would have avoided the fine and also benefited from a better-trained workforce.
So, if your organisation operates in the share brokerage industry, think carefully about the risk-reward profile of Cobent’s learning management system (lms), because if you make the wrong choice, and you or your representatives breach regulations, you could be facing a crippling fine - courtesy of the FSA.
No comments:
Post a Comment