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FCA eyes action over unsuitable advice on high-risk products

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The FCA has said it will launch further work to crack down on those giving unsuitable advice on high-risk products.

In its business plan for 2017/18 released this morning, the regulator notes one of the main issues in the retail investment market is that consumers might receive unsuitable investment advice.

In particular, it says it will conduct a review into unsuitable advice on complex products, to be completed by the fourth quarter of 2017/18.

The regulator also says it would also conduct follow up work to its current review of advice suitability, to be completed by the second quarter of 2018/19.

The FCA notes from its investigations so far, “firms do not always consider consumers’ needs and outcomes appropriately when they develop products, distribution propositions, and offer wealth management services” and “advisers may give insufficient attention to the total cost of investment products and of advice, which results in poor value for money for consumers.”

It adds: “We will carry out further work to target those firms providing unsuitable advice about complex products.”

The FCA adds that among it priorities was developing further resources to guide entrants into the robo-advice market, but that it would also be assessing the outcomes of robo-advice by the middle of next year.

The regulator says: “Depending on the speed with which this area grows, we may decide to test the suitability of advice given by firms providing this kind of advice.”



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Yes as usual let’s slam the door and bolt it when the horse has gone. What about the FCA auwful track record on swoops, it’s obviously happy with the banks ignoring COBs, and deliberately giving bad advice.
    The FCA is as crooked as the worst out there, you had better believe it.

  2. So, trying to prevent being scammed and losing a lifetimes efforts in ‘in the business plan for next year” is it?

    Well done FCA. Why not busy yourself until then looking at the odd basis point here or there on well run OEICS or what advisers charge.

  3. When will this endless merry-go-round end…. (my thoughts, with my head in my hands)
    Review after review, cost on top of cost, consultation on consultation………

    Regulate the products !!!!!!!!! you bunch of useless morons

    If they are not fit enough to be on the shelf, then they cant be sold !

    Are you all (FCA) really that stupid ?

    • Why not ban the stupid adviser?

      • Nick…I agree, however…
        Its quite clear the FCA are incapable of doing that, wether, this is due to ignorance, or just plain stupidity, (a mixture of both I wonder)

        Its not as if they lack in information now is it ? but here we are, the FCA are so far behind the gain line, well in most cases 5 years behind !

  4. (Almost) better never than this late. Why didn’t the regulator (at least start to) tackle this now massive problem, reflected in skyrocketing FSCS levies, 15 years ago?

  5. I was persuaded to buy a hybrid car manufactured by firm X. Under the bonnet it appears to be very complicated and I don’t understand how it works. So, can I complain and get some compensation for this (paid for by all of the manufacturers other than firm X) ?

  6. Yes that person you are so right, regulate the product and stop being so stupid FCA.

  7. SJP was savaged on this site at the beginning of March by advisers complaining about opaque charges highlighted in an article about David Bellamy. Not much savaging going on now?!

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