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(Alliance News) – Measures to clamp down on unfair or misleading financial marketing in the UK have been proposed by the City regulator.
The Financial Conduct Authority has outlined new screening checks to make sure firms can show they have the right expertise before approving financial promotions.
Currently, any FCA authorised firm is allowed to approve financial promotions on behalf of other firms who are not authorised by the regulator.
But changes being introduced by Parliament will require authorised firms to undergo new screening checks before they are allowed to approve financial promotions, giving the FCA greater oversight to stop harm.
Firms will also be required to regularly report back to the FCA on financial promotions they have approved, which the regulator said will help it to crackdown on rogue adverts.
The proposed reforms will ensure the FCA can act quickly to put a stop to harmful financial promotions communicated by unauthorised firms, including in areas such as high-risk investments and buy now pay later.
The FCA’s consultation document said that in the past: “We’ve seen evidence of consumers investing in high-risk products that are not aligned with their risk tolerance, due to poor-quality approved financial promotions.
“In the worst cases, the performance of investments was markedly different from the claims made in promotions or the product failed, in each case leading to significant and unexpected losses for retail investors.”
Sarah Pritchard, executive director, markets at the FCA said: “Social media and online advertising means that consumers are taking less time between seeing a promotion and making a financial decision.
“It is, therefore, essential that they are equipped with the right information at the right time so that they can make good financial decisions. This is especially important as we face the rising cost-of-living.
“These proposals will ensure those approving ads have the appropriate expertise and are held accountable for the promotions they sign off.”
The consultation is open until February 7, 2023.
By Vicky Shaw, PA Personal Finance Correspondent
Press Association: Finance
source: PA
Copyright 2022 Alliance News Ltd. All Rights Reserved.
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