FCA intervened in over 200 financial promotions in past year
The FCA has forced firms to amend or withdraw 204 financial promotions in the 12 months to 30 June, according to regulatory consultancy Bovill.
Bovill, which obtained the figure through a freedom of information request, says regulated firms are still struggling to stick to the rules when marketing their products and the FCA has been forced to intervene.
The regulatory consultants say typical failings over financial promotions rules include; excessive investment jargon, and font sizes for warning statements being too small and difficult to read.
Firms also fell short with unclear risk warnings, incorrect yield figures and products being described as “secure” or “guaranteed” with no evidence.
Bovill head of wealth management Mark Spiers says: “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.
“The FCA is most concerned that promotions give as much prominence to the risks of an investment as its potential returns.”
Spiers says: “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.”
Positive Solutions was criticised by advisers last year for its tough controls on social media.
Yesterday, Labour leader Ed Miliband called for payday lenders to be be banned from advertising during children’s programmes. Last week Moneysavingexpert.com founder Martin Lewis accused short-term lenders of “grooming” children for loans through advertising.
The FCA will regulate payday lenders from next April with the power to ban advertising.