The FCA will crack down on ‘high-risk’ advice, officials pledged today.

The regulator, setting out its plans for the next financial year, indicated a toughening of its stance in regards to authorising firms who are advising on high-risk investments.

This was listed second in its top priorities within the retail investments sector for the next 12 months.

In its Business Plan for 2018/19, the FCA stated:“In 2018/19 we will carry out a programme of work to tackle incidences of consumers entering into high-risk investments which
are unsuitable for their needs.

“This work will enable us to identify where there are problems with high-risk investments.

“We will also strengthen our authorisations gateway and supervision for firms that provide advice on high-risk and complex investments.

“This will ensure they improve their disclosure and reduce the risks of harm to retail investors.” 

The report described “high-risk investments” as being “characterised by unusual, speculative or complex product structures, investment strategies or terms and features. As consumers look for better returns, some are buying products, which are unlikely to meet their savings or investment needs.”

The FCA’s top priorities for retail investments:

• Assessing the impact of
the Financial Advice Market Review (FAMR) and the Retail Distribution Review (RDR)
• Reviewing High-risk and complex investments
• Evaluating our interventions on Contracts for Difference
• Publishing our report on the Investment Platforms Market Study
• Raising awareness of fraud and scams

The FCA also announced proposals today to increase the levy for Financial Planners and advisers. Click HERE for full story.