FCA helps customers to find a financial adviser

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Article by Phil

Figures released by the FCA show that they cracked down on over 1,800 adverts and promotions by unregulated firms in order to help customers find a financial adviser who was authorised. Fourteen times more than 2021.

In addition, they cracked down on over 8,000 other financial advertisements in 2022. Up 30% on the year before.

New software allowed them to look at over 180,000 financial websites offering to find a financial adviser during the year. Of these, 4,500 were reviewed and over 400 websites were taken down. They also managed to look at firms who had lost their authorisations.

The FCA have said that they are also keen to review more social media platforms and associated promotions. Cracking down on so called “Fin-influences” who particularly target young people with crypto promotions.

On this front, the government has just announced a consultation on the regulation of crypto assets and crypto trading. The intention is to introduce regulation to protect consumers. But at the moment it is not clear who will be the regulator and what the rules will be. The consultation will last until 30th April.

The regulation regime will cover crypto exchanges, crypto custody and crypto lending. The consultation paper proposes prudential requirements, data reporting, consumer protection, and operational resilience procedures. Given that 85% of crypto firms failed to pass the FCA tests for money laundering, some commentators are sceptical about how successful regulation will be.

However, the FCA has recently taken action in conjunction with West Yorkshire police, to shut down a number of illegal crypto ATM’s.

Who knew? Apparently, a number of mobile crypto cash machines have sprung up. These allow individuals to exchange their crypto assets for cash. This is illegal. The FCA authorises crypto exchanges in order to find a financial adviser, which must be able to demonstrate compliance with money laundering regulations. So far very few have passed the test. The police are rightly concerned that the use of crypto ATM’s is a method of converting illegal earnings into cash.

As well as consumer protection the government wants to encourage the grow of a regulated crypto industry in the UK.

Adviser firms however are concerned about the costs of regulation falling under the FCA’s remit, because it will mean higher costs for firms. The same concern has been expressed if protection if proposed under the FSCS. Financial advisers pay towards the FSCS and do not want to have to pay the bill for crypto failures.

In a separate consultation, the government is looking at new rules to compensate victims of scams. In new proposals, Pay.UK would take over the “regulation” of Banks and Building Societies to re-imburse victims of scams. They would be required to refund victims of scams valued at over £100 within two working days. This sounds like a good idea. However, there are some concerns that  Pay.UK would have no powers to enforce action on Banks if they failed to pay on time. With Pay.UK being a new body funded by the Banks themselves.

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The FCA doesn’t catch everyone however! They are reportedly taking action against Argento Investments for taking over £2.8 million in client deposits without the necessary permissions. What’s interesting about this, is that the owner of Argento Daniel Wills was named Wealth Management Executive of the Year by little known Acquisition International magazine in 2020. It seems he used this accolade to add an air of legitimacy to the business. You need to careful about these types of “awards” which can often be bought rather than earned. The safest thing is always to check the FCA register to confirm whether a firm is authorised or not.

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