The UK Financial Conduct Authority said on Wednesday that a review of firms approving financial promotions found some need to raise standards, with one firm required to conduct a remediation exercise and some websites blocked to retail customers.
The review assessed 10 authorised firms that approve financial promotions for businesses not authorised by the FCA, known as Section 21 approvers. The FCA looked at firms approving promotions for Buy Now Pay Later, crowdfunding and corporate finance companies.
Unsubstantiated claims and mis-targeted promotions
The FCA said the strongest firms were applying the Consumer Duty from the start of their approval processes and were able to make sure every promotion was accurate, clear and reached the right audience.
Other firms approved adverts with unsubstantiated claims, allowed retail investors to see promotions intended for professional clients, or relied on third-party templates instead of carrying out their own checks.
“Consumers see these promotions daily, in social media feeds, online adverts, websites and apps. When approvers fail in their responsibilities, people can be misled into harmful financial decisions,” said Lucy Castledine, director of consumer investments at the FCA.
The FCA said it will continue to monitor compliance and hold firms that fall short to account.
Post-gateway supervision
The rules requiring FCA-authorised firms to hold a specific permission before approving promotions for unauthorised businesses came into force on 7 February 2024. The review sampled promotions approved since each firm was authorised under the new gateway, making this an early test of whether the regime is producing better sign-off in practice.
The FCA has been tightening its promotions oversight across several fronts in recent years, including work on high-risk investment marketing, crypto firm advertising rules and finfluencer social media ads.
