FSA clamps down on misleading product ads by finacial services firms
22 Aug 2011
In the UK, the Financial Services Authority (FSA) has sharpened focus on misleading advertising, leading to a 32-per cent increase in the number of promotions withdrawn by financial services firms.
Law firm Reynolds Porter Chamberlain (RPC), which requested information with a freedom of information request was told that financial advisers and banks withdrew 262 promotions in 2010, up from 199 in 2009 following enquiries from the FSA.
The first quarter of 2011, had seen 66 promotions withdrawn as against 50 in the same period in 2010.
According to RPC partner Jonathan Davies the regulator was tightening the screws even as it was about to gain new powers of intervention when it morphed into the Financial Conduct Authority in 2013.
He said giving equal prominence to risks and rewards was a very judgmental concept, on which reasonable people could easily disagree and the FSA was increasingly forcing its view on firms.
He added in future, a firm which disagreed with the FCA, which would be regulating the area once the FSA was replaced, would be named and shamed before the disagreement could be resolved by an independent tribunal.