Financial Planners have backed plans announced by the FCA in its sweeping Consumer Investments strategy released yesterday to tackle consumer investment 'harm'.

As part of its annual strategy released yesterday, the regulator launched a new ‘investment harm’ campaign. 

Financial Planners have welcomed the new campaign, saying it is especially welcome for educating potential younger clients.

Graeme Inglis, director and Chartered Financial Planner at Scottish-based Poise Financial Planning, said: “This is a positive move by the FCA, particularly for younger clients who may not be aware of the risks associated with higher risk arrangements. Educating and helping younger investors make the correct decisions is vital to a flourishing financial advice marketplace.”

Joshua Gerstler, Chartered Financial Planner at Borehamwood-based The Orchard Practice, also welcomed the new campaign from the regulator.

He said: “It is good to see the FCA trying to protect consumers. Unfortunately, there are always going to be unscrupulous individuals trying to take advantage of people and unfortunately a lot of them are going to get away with it. The most pleasing aspect is that the FCA are recognising that cash is not the best place for people to leave their money for long-term growth and that they want to encourage people to invest safely.”

Lena Patel, Chartered Financial Planner at Leicestershire-based ISJ Independent Financial Planning, was a little more reserved in her reaction to the investment harm campaign and said more need to be done by the FCA to close the advice gap.

She said: “Providing a high quality, affordable advice market comes at a cost and the FCA needs to recognise this. With an ageing adviser population, this gap is going to widen and we need to encourage more people into the profession. Advisers need to be supported by the FCA and the press to share good news stories, and to encourage consumers to seek reputable IFAs to support them to make informed decisions with their Financial Planning. This will reduce the risk of consumers being targeted by scammers.”

The FCA said its new strategy is aimed at giving consumers the confidence to invest, supported by a “high-quality, affordable advice market”, which should lead, according to the FCA, to fewer people being scammed or persuaded to invest in products too risky for their needs.

To help achieve its aims the FCA has outlined a package of measures including:

• Exploring regulatory changes to make it easier for firms to provide more help to consumers who want to invest in relatively straightforward products
• Launching a new £11m investment harm campaign promoted by high profile individuals to help consumers make better-informed investment decisions and to reduce the number investing in “inappropriate” high-risk investments
• Being more "assertive and agile" in how the FCA detects, disrupts and takes action against scammers
• Strengthening the Appointed Representatives (AR) regime to raise the quality of financial advice
• Strengthening the financial promotions regime in key areas, including the classification of high-risk investments and segmenting the high-risk market and strengthening the requirements on firms when they approve financial promotions
• Reviewing the compensation framework to ensure that it remains "proportionate and appropriate", particularly where firms fail leaving behind compensation liabilities for the FSCS to address. This will reduce the cost and impact of poor advice, the FCA says

The FCA set out the focus of its role and the changes that will be made to meet current and future challenges in its Business Plan 2021/22. In early 2022, the FCA plans to publish wholesale and retail strategies to set out the ambitions for these markets.