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.
FG 21/3 – client objectives
Alistair MacDougall Compliance Drawdown, FCA, ML, Pension, Pension Transfer, PI, transfer
Following on from our previous articles on FG21/3, we will look today at another of the interesting areas covered by the guidance. It goes without saying that the guidance itself is helpful, reiterating and emphasising previous rules and guidance and clarifying some areas that were arguably fuzzy before. However, as well as the actual content, […]