LONDON (Reuters) – Britain’s markets watchdog curbed activities of twice as many consumer investment firms in the last financial year as the previous year, it said on Tuesday, as it seeks to clamp down on poor financial advice and scams.
The restrictions included preventing firms from promoting and selling certain products or providing specific services like advice on defined benefit – or final salary – pension transfers, the Financial Conduct Authority said in a statement.
Under Chief Executive Nikhil Rathi, lawmakers have pressured the FCA to make radical changes so it can spot misconduct faster, after a surge in online scams since people were forced to work from home due to COVID-19 restrictions.
The watchdog was heavily criticised in 2020 in an independent report into the collapse of investment firm London Capital & Finance and it has pledged to improve how it deals with information received from the public.
“We want to see a consumer investment market where consumers can invest with confidence, understanding the level of risk they are taking, and where assertive action is taken when harm is identified,” said Sarah Pritchard, executive director of markets at the FCA.
The FCA said it stopped 17 firms and seven individuals from getting new FCA authorisation last year where it suspected phoenixing – people moving to or setting up a new firm to avoid the consequences of having provided unsuitable advice.
It also stopped the UK operations of 16 contracts for difference providers where it suspected scams, or where consumers were encouraged to trade excessively to generate revenue.
Without FCA action, consumers could have lost around 100 million pounds ($114.28 million) a year, the watchdog said.Â
The FCA said it published more than 1,800 consumer alerts about unauthorised firms or individuals last year, 40% more than the previous year. Â
($1 = 0.8750 pounds)
(Reporting by Carolyn Cohn and Kirstin Ridley; Editing by Josie Kao)