PIMFA has urged the Financial Conduct Authority to move ahead with proposals to strengthening rules around financial promotions rules for higher risk investments.
The organisation, which is the trade association for wealth management, investment services and the investment and financial advice industry, believes changes should be made to focus on consumer protection balanced against their own personal responsibilities.
It believes an approach should be implemented to ensure those who could benefit from higher risk investments are not inadvertently excluded from them due to friction that encourage consumers not to deal when they should.
PIMFA stated the approval of financial promotions should be a regulated activity. The trad association said it was welcome to see a discussion paper on investor exemptions for higher risk investments, but is disappointed by many proposals being tested against how they impact consumer behaviour.
PIMFA senior policy adviser Simon Harrington said, “We believe there is scope in testing a number of these and believe the FCA should return in the near future with a consultation, which evidences how consumer behaviour is impacted with the positive frictions, which it introduces in this discussion paper.
“More broadly, it is disappointing that the direction of travel for the approval of financial promotions seems to be that the government and regulator are seeking to make tweaks to the existing regime rather than overhaul it. As we set out to the Treasury in our response on the approval of financial promotions, we believe that this should, ultimately, be a regulated activity. We have enhanced concerns about businesses who see this activity as a viable revenue stream and this in combination with a lack of regulatory oversight will only continue to introduce harm into the market.”
The FCA is a call for input on the changes to financial promotions to consumers.
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