Firms that approve financial promotions should be doing more to protect consumers, an FCA review has found. The FCA found that the strongest firms were applying the Consumer Duty from the start of their processes. They were able to make sure that every promotion approved was accurate, clear and reached the right audience.However, the FCA also found that some firms approved adverts with unsubstantiated claims or allowed retail investors to see promotions intended for professional clients. In some cases, firms relied on third-party templates instead of doing proper checks themselves.The review focussed on sampling promotions that had been approved since the firm was authorised.Lucy Castledine, director of consumer investments at the FCA, said:’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. ‘Firms must make sure every promotion they sign off is fair, clear and not misleading.’ As a result of the FCA’s work, one firm has already had to conduct a remediation exercise and some websites have been blocked to retail customers.The FCA will continue to monitor compliance and will hold firms that fall short to account.Notes to editorsThe review assessed 10 authorised firms that approve financial promotions for businesses which are not authorised by the FCA.Section 21 approvers are FCA-authorised firms that have the permission to approve financial promotions for businesses that aren’t authorised. They must check that these promotions follow FCA rules, so the products can be legally marketed to UK consumers.The FCA looked at firms who were approving financial promotions for Buy Now Pay Later, crowdfunding and corporate finance firms. The rules on authorised firms approving promotions for unauthorised firms came into force on 7 February 2024.
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