As the FCA continue to express concern over financial promotions and communications and closely monitor material, firms should ensure that they comply with regulations, notably the Consumer Duty, during marketing and communication activities.
The regulator has announced that, as a result of its intervention, over 10,000 financial adverts and promotions were withdrawn or amended in 2023- an annual increase of 16.6%.
Data published by the FCA reveals that it has:
• Published 2,285 alerts to help prevent consumers from losing money to scams, up from 1,800 in 2022.
• After being granted new powers by the Government, increased its focus on illegal crypto asset promotions targeting UK customers and issued 450 consumer alerts between October and December 2023. Finalised non-handbook FCA guidance on Crypto Asset Promotions was released in June 2023.
• Expressed growing concerns surrounding the rise of ‘finfluencers’- influencers who use social media or other online platforms to share or promote financial advice, guidance and content- and the promotion of financial products, such as credit and investments, on social media to target young users.
• In 2023, engaged with 43 unauthorised firms concerning debt solutions activity, issued 30 alerts and, where appropriate, suspended websites and social media accounts. The FCA also engaged with other regulators where necessary.
Director of Consumer Investments at the FCA, Lucy Castledine, states: 'People need clear, fair and accurate information to base their financial decisions on. We will continue to intervene and take action when we identify firms not meeting our minimum standards.'
As of 7 February 2024, authorised firms required FCA permission to approve promotions from unregulated persons, with the aim of ensuring that firms approving financial promotions had the required expertise and competence regarding the promotions they were offering.
The regulation of financial promotions and communications is underpinned by The Consumer Duty, which came into effect in July 2023, which requires firms to:
• provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than burying key information in lengthy terms and conditions; and
• focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction – which includes the marketing and communication of any financial promotions.
The regulator is increasing its review of complaint handling procedures, with a view to detecting problems and establishing a cohesive approach to marketing financial products.
As a result, firms should ensure that they are aware of and properly understand FCA guidance, rules and regulation, with a focus on Consumer Duty, and that any financial promotions are compliant.
Support and Guidance for those involved in Marketing
Searchlight is hosting a live Financial Promotions webinar on 27th February to help those involved in producing marketing material to understand more about the key, applicable FCA rules and requirements.
Why attend?
The course examines what a financial promotion is and some do's and don’ts which can help to ensure that your advertising is compliant and can stand up to scrutiny. The session will benefit those responsible for compliance, management, and financial advertising. Record-keeping requirements and the approval process are also covered.
Learning Objectives
🔸 Understand FCA rules and requirements regarding advertising materials
🔸 Awareness of the impact the Advertising Standards Authority has on financial promotions
🔸 Understand the responsibilities of intermediaries, brokers and third parties
🔸 Understand how to approve a financial promotion from start to finish
🔸 Consider rules and requirements from your organisation’s perspective
🔸 Recognise and implement effective review and sign-off processes
🔸 Understand how to achieve best practices and recognise what good and bad promotions look like by observing examples and case studies
Register your place at: https://www.searchlightsolutions.co.uk/financial-promotions/
About the author
Rebecca Matyear
Rebecca recently joined us in 2024 as a Senior Content Writer and has experience researching and creating multimedia content. With a keen interest in current and emerging industry affairs, Rebecca responds through a critical lens and, by promoting thought and discussion, aims to increase awareness of UKGI’s work.
