The Financial Conduct Authority (FCA) is likely to be more ‘intrusive' than its predecessor on the policing of firms' financial promotions and has so far intervened more than 200 times on the issue, according to a consultancy.
Regulatory consultancy Bovill found, following a freedom of information request, that the regulator had withdrawn or amended 204 financial promotions in the year to July.
It warned firms that the FCA was likely to increase its policing efforts under its new sole focus on conduct.
Bovill head of wealth management Mark Spiers said: "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's sole focus on firms' conduct and the new intervention tools means it may well be a more intrusive regulator of financial promotions than its predecessor."
Among the issues the FCA was most concerned, the consultancy found, was "that promotions give as much prominence to the risks of an investment as its potential returns".
It said that typical failings in financial promotions included: excessive investment jargon in adverts, too small font sizes for warning statements, a lack of clarity around products that place a client's capital at risk, imbalanced expressions of yield figures, and using words like "guaranteed," "protected" or "secure" with nothing to confirm this.
Bovill also pointed out that pressure on firms was mounting due to the FCA's new power to publicly name and shame firms before warning them privately.
Spiers said: "Under the FSA regime, if a firm was found to have violated the guidelines, the FSA had to write to them privately with concerns over a promotion, whereas the FCA can chastise them publicly without having to jump through the hoop of warning them privately first.
"Firms are now more nervous of making mistakes because of the potential damage to them of making a mistake."
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