The FCA has recently issued a ‘Dear CEO’ letter to all regulated firms regarding the matter of financial promotions.
The important point to note is that the FCA is concerned about a financial promotion which covers areas of the firm’s business which may not be regulated, such as risk management.
Where any regulated firm issues any financial promotion, which covers such an aspect, it must be abundantly clear to the reader that these services are NOT authorised and regulated by the FCA. We would also recommend that it is clearly noted that the protection offered by the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) therefore does not apply.
What is sometimes forgotten or overlooked is that your website is possibly your biggest (and possibly only) financial promotion and is subject to all the financial promotions rules and requirements. Where you mention any unregulated services in your website material, you must make it clear that these are not regulated.
Also, do not forget your client TOBA or service agreement - this should also make the distinction.
We would urge all firms who offer such services to review the relevant material to ensure it meets the FCA’s expectations.
About the author
Bruce Fayle
Bruce has worked in financial services for the whole of his professional life, including 11 years as a Compliance Director of a US owned Independent Financial Advisory and Wealth Management business. At RWA, Bruce led the Audit and Conduct Risk department from our Manchester office. Bruce left RWA in 2023
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