FCA insists it protects consumers from investment harm despite criticism
The Financial Conduct Authority (FCA) opened 1,500 supervisory cases involving scams or high risk investments in the first 10 months of 2020, in an effort to clamp down on consumer investment harm.
The city regulator also stopped applications for authorisation from 343 financial services firms and individuals where the potential for consumer harm was identified – almost one in 10 applications – as part of the effort.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “The UK has one of the world’s leading financial services industries, offering consumers access to a wide range of investment products. In some areas however, the consumer investment market is not working as well as it should and too often consumers are offered unsuitable products or advice.
“Protecting consumers and ensuring they have confidence in the suitability of advice they receive is a key priority for the FCA and today’s report highlights some of the work we are undertaking to achieve this.”
Despite the FCA’s efforts the regulator continues to be accused of falling short of the mark when it comes to protecting consumers.
A damning recent independent report on the London Capital & Finance (LCF) scandal found the FCA did not effectively supervise and regulate the company before it collapsed.
LCF went into administration in January 2019, impacting over 11,000 people who invested around £237m in the company through mini-bonds. They are non-transferable assets that let retail investors invest in a company, but can be very risky.
The report, which was written by former judge Dame Elizabeth Gloster, said FCA staff needed to be better trained in spotting fraud and problems in financial filings and documents.