FCA tells financial sector to communicate clearly

FCA tells financial sector to communicate clearly

Financial services firms should communicate with their clients in a clear and engaging way, the FCA has said.

The City watchdog has published an online discussion paper, Smarter Consumer Communications, to encourage firms to use innovative ways of communicating their products and services to consumers.

Christopher Woolard, director of strategy and competition at the FCA, said: “All too often, customer communications are so technical that even the most astute consumer would struggle to understand the information.

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“Communications play a fundamental role in helping consumers make decisions about the products and services they buy, which is why it’s so important that we work with firms to get this right.”

The regulator has suggested using interactive apps to help consumers understand and manage their product as well as the use of video and infographics.

Among the examples the regulator gives are Nationwide, which used a series of videos to help 11 to 17-year-olds understand key banking concepts, and the Australian Securities and Investment Commission, which developed a series of comics to educate consumers.

The discussion paper stated: “Through this work, we identified a number of common behaviours among firms or perceived barriers that were limiting the development of effective communications.”

Adviser view

Adrian Murphy, a partner with Glasgow-based Murphy Wealth, said: “I agree with the FCA. We communicate with our clients in a really simple way and put all the technical stuff in the appendix.

“In a regulated industry you have to be aware of that, but you cannot allow regulation to be the overriding factor in everything you do.”