Firms that approve financial promotions should be doing more to
protect consumers, an FCA review has found.
The FCA found that the strongest firms were applying
the Consumer Duty from the
start of their processes. They were able to make sure that every
promotion approved was accurate, clear and reached the right
audience.
However, the FCA also found that some firms approved adverts with
unsubstantiated claims or allowed retail investors to see
promotions intended for professional clients. In some cases,
firms relied on third-party templates instead of doing proper
checks themselves.
The review focussed on sampling promotions that had been approved
since the firm was authorised.
Lucy Castledine, director of consumer investments at the FCA,
said:
'Consumers see these promotions daily - in social media feeds,
online adverts, websites and apps. When approvers fail in their
responsibilities, people can be misled into harmful financial
decisions.
'Firms must make sure every promotion they sign off is fair,
clear and not misleading.'
As a result of the FCA's work, one firm has already had to
conduct a remediation exercise and some websites have been
blocked to retail customers.
The FCA will continue to monitor compliance and will hold firms
that fall short to account.
Notes to editors
- The
review assessed 10 authorised firms that approve financial
promotions for businesses which are not authorised by the FCA.
-
Section 21
approvers are FCA-authorised firms that have the
permission to approve financial promotions for businesses that
aren't authorised. They must check that these promotions follow
FCA rules, so the products can be legally marketed to UK
consumers.
- The FCA
looked at firms who were approving financial promotions for Buy
Now Pay Later, crowdfunding and corporate finance firms. The
rules on authorised firms approving promotions for unauthorised
firms came into force on 7 February 2024.
