The FCA is stepping up its scrutiny on financial promotions by actively monitoring promotions and issuing warnings to firms that breach the rules.
The main issues of concern are:
- The excessive use of investment jargon (which could confuse the consumer);
- Font sizes for warning statements being too small and difficult to read;
- The risk posed by a product or service that placed a client’s capital at risk, not being made abundantly clear;
- Promotions which incorrectly gave a yield figure that did not give a balanced impression of both the short and long term prospects for the investment;
- When promotional advertisements describe a product or service as being ‘guaranteed’, ‘protected’ or ‘secure’ without any further confirmation or explanation.
The FCA is most concerned about promotions that highlight the potential returns without giving as much prominence to the risks of the investment.
Pension Transfers – considering a workplace pension
Alistair MacDougall Compliance Defined Benefit, FCA, Pension, Pension Transfer, PI, Switch, transfer
We recently reviewed a pension transfer report where the client was recommended to transfer out of the defined benefit scheme into the client’s pre-existing SIPP. We considered that the recommendation to transfer appeared to be appropriate. However, the client had what the FCA calls an ‘available qualifying scheme’, more commonly referred to as a […]