Increasingly widespread marketing of financial promotions has prompted new actions from the FCA. How could your firm be affected, and what can you do to adapt?

Growing concerns about consumer safety have prompted new action from the Financial Conduct Authority (FCA) relating to financial promotions. Two years in and out of lockdowns in a highly digital environment have meant that investing has become more and more accessible for the average consumer, leading to a rise of new and amateur investors. In turn, businesses have advertised their offerings accordingly—but in light of new research about how investment losses could significantly impact less experienced investors, more is being done to regulate how investments and financial promotions are advertised.

In a recent update, the FCA explained that it is looking to “ensure firms that approve and communicate financial marketing have relevant expertise and understanding of the investments being offered, improve risk warnings on ads and ban incentives to invest, for example new joiner or refer-a-friend bonuses.” The regulator also plans to encourage “more robust” questioning to clarify the knowledge and experience of investors, and place greater scrutiny on high-risk investment advertising. New rules and a handbook are promised for summer 2022 and more detail on the FCA’s consultation is available here.

What does this mean for businesses?

In short, this is an expansion of the duty placed on regulated firms and on the regulator itself to help protect consumers. More scrutiny from above means that it is more important than ever to keep track of the financial promotions that your firm approves or denies. This can look like centralising your workflow approvals in one place for easy oversight and having clear audit trails to present to the regulator.

Using dedicated compliance management software like ComplyPortal’s Approvals module helps compliance officers and senior managers with keeping accurate, easily accessible, and well-organised records. Tracking a firm’s internal approval process for a financial promotion is made simple with ComplyPortal, which automates workflows from the initial request through approval or declination of a financial promotion. As well as ready-to-use registers for Financial Promotions, users have the option to add bespoke registers specific to their organisation’s needs.

With the many plates that compliance officers and senior managers have to spin, having a detailed and easy-to-use method of recording approvals brings some much-needed ease to the compliance management process.

Find out more about how the ComplyPortal platform can help firms adapt to new financial promotions expectations at:

About ComplyPortal:

First developed in 2011 by compliance professionals for compliance officers, ComplyPortal offers workflow, automation, and several modules to help firms with control and regulatory compliance monitoring.

ComplyPortal simplifies financial services regulatory compliance management on an easy-to-use cloud-based comprehensive compliance platform. It enables compliance officers, risk officers and senior management to keep track of their firm’s regulatory responsibilities and workflows. Our platform includes the following modules, among others:

  • Monitoring: a year-round schedule pre-populated with monitoring questionnaires to ease compliance processes.
  • Registers: lists controlled by the Compliance officer, but easy for staff to view.
  • Risk: map and control risk areas to effectively identify and manage risk for your firm.
  • eKYC solution: perform comprehensive searches, including client identity verification, document authenticity, and more for a comprehensive KYC and AML approach