ShareSoc and the UK Shareholders Association made a joint submission on the FCA Discussion Paper DP21/1 Strengthening our financial promotion rules for high-risk investments and firms approving financial promotions.
In a 9 page response to the FCA, we noted:
ShareSoc and UKSA represent the views of individual investors (aka retail investors). We have combined over 8,000 members. This is an important discussion paper and we welcome the chance to submit our views. We would be happy to meet to give further background.
We think there should be an effective duty of care to the consumer, so that financial firms should not be able to prey on the less sophisticated consumer. Consumers should expect that financial firms will provide a good quality level of service and that they will not seek to extract high fees for inappropriate products.
We would prefer a principles rather than a rules based approach.
In such an environment, financial firms would not seek to arbitrage regulations. The onus would be on them to provide sensible advice and guide less sophisticated investors away from high risk products.
This would also require an enforcement regime where malfeasance was dealt with promptly and transparently, and examples were made so as to warn industry employees/directors to not to pursue bad/risky practices: it would also give reassurance to knowledgeable, financially educated consumers about the advice they were being given.
Our full response is here FCA Discussion Paper DP21_1 Joint submission on behalf of Private Investors from ShareSoc and UKSA
The FCA Discussion paper can be viewed here https://www.fca.org.uk/publication/discussion/dp21-1.pdf
Cliff Weight, Director, ShareSoc
2 July 2021