FCA clamps down on misleading financial promotions

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There was a 61% jump in the number of financial promotions withdrawn or amended by the FCA in the last year, from 204 in 2012/13 up to 328 in 2013/14, according to Bovill, the specialist financial services regulatory consultancy.

The large increase is the result of an increasingly interventionist approach by the FCA as well as a raft of recent updates to the rules on financial promotions.

The FCA has taken on new powers to intervene in firms' marketing of financial products. For example, the FCA recently used its temporary product intervention powers to ban the sale of an investment instrument to retail investors for one year.

The regulator has targeted specific sectors including payday loans and debt management after taking over responsibility for consumer credit in April.

In addition, firms are still grappling with implementing the FCA's new guidance in areas such as promoting financial products on social media.

Mark Spiers, head of wealth management at Bovill, said: "This sharp jump shows that the FCA is scrutinising ever more intensively how the financial promotion rules are being applied and highlights the growing challenges firms face in getting it right."

"While it's vital that the FCA is vigilant in protecting retail investors in particular, staying within the financial promotions rules is a very tricky balancing act for firms, as it is fairly easy to overstep the mark."

"As the regulator becomes increasingly pro-active - much more so than its predecessor the FSA - and issues a spate of recent changes and clarifications to its guidance, many firms are scrambling to keep up."

"Firms can't afford to make mistakes. Not only will the FCA expect decisive remedial action from any firms who get it wrong, they could also face the prospect of getting a public ticking off from the regulator, which could be hugely damaging to their reputation."

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