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FSA &#39safe harbour&#39 on promotions

The FSA has provided what it calls a “safe harbour” to authorised firms in spelling out how they are allowed to word financial promotions.

The move will affect IFAs who conduct direct-offer business on the internet and those who send out Isa guides or similar promotions.

It aims to clarify the position on what firms “can and cannot say and how they can and cannot say it” according to the FSA.

The group most affected will be law practices which advise authorised firms about the legality of a new advertising campaign or marketing promotion, says the regulator.

The FSA claims direct salesforces and appointed representatives who tend to do more cold-calling to try and drum up business will be more affected than IFAs whose business tends to walk through the door.

The guidance defines terms such as an invitation which is either a direct offer or internet promotion and an inducement which is an advertisement trying to motivate investors to save through a specific product.

The regulator says the information is necessary because the rules defining how promotions are allowed are “full of legalese and confusing to most.”

FSA spokesman Robin Gordon Walker says: “The existing financial promotion order is a complicated document and people tend to not understand it. We are seeking to create a safe harbour by explaining as far as possible the requirements and give practical examples of where a certain type of activity is or is not permitted.

“Those financial advisers who are doing a financial promotion will be affected not because they are financial adviser but because they are doing a financial promotion.”

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