Regulation  

FCA intervened on 204 promotions in past year

The Financial Conduct Authority has ordered firms to amend or withdraw more than 200 financial promotions in the year to 30 June 2013, according to a freedom of information request from regulatory consultancy Bovill.

The firm found that 204 financial promotions had been changed or scrapped completely, suggesting firms are still finding it difficult to follow the rules when promoting their products.

Mark Spiers, head of wealth management at Bovill, said: “We are expecting the regulator to be getting ever more pro-active in policing the financial promotion rules. If it thinks firms have overstepped the rules, it will be quick to intervene.

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“The FCA is most concerned that promotions give as much prominence to the risks of an investment as its potential returns.”

According to Bovill, common failings include using excessive jargon, using font sizes for warnings which are too small, not making clear that a client’s capital could be at risk, misrepresenting the short and long term prospects for an investment, or not being able to back up claims of a product being “guaranteed”, “secure”, or other attractive qualities.

Mr Spiers added: “Forward-thinking financial services firms are using social networks like Twitter, LinkedIn or even Facebook to market their products or brand.

“The decentralised nature of how social media is used by some firms makes it harder for the firm to manage and control what their staff are doing on social networks than traditional channels. This risks landing them in hot water with the regulator if their staff fall foul of the financial promotions rules.”