FCA seeks views on how to improve the consumer investment market

Too often consumers receive lower returns than they should because of unsuitable products with high fees.

In a complex and diverse market with more than 5,000 advice firms and over 27,000 advisers, it’s essential that consumers have confidence in the suitability of advice they receive. 

This is why reducing harm in the consumer investments market was identified as a priority in the FCA’s 2020/21 Business Plan. 

The feedback we receive will shape the FCA’s work in the coming years to deliver a market that works well for the millions of people who rely on it. 

The CFI is seeking views on the following key questions:

• What more can we do to help the market offer a range of products that meet straightforward investment needs? 
• How can we better ensure that those who have the financial resources to accept the risks of higher risk investments can do so if they wish, but in a way that ensures they understand the risk they are taking?  
• How can we use the regulation of financial promotions to make it easier for people to understand the level of regulatory protections afforded to them when they invest?  
• What more can we do to ensure that when people lose money because of an act or omission of a regulated firm, they are appropriately compensated and that it is paid for fairly by those who cause the loss?  
• How can people be better protected from scams?
•  How do we help this market to be competitive, with firms striving to offer better products and services?  

The FCA’s Interim Chief Executive, Christopher Woolard, said:

'The consumer investment market is not working as well as it should. There have been too many scams and scandals and too often consumers are offered unsuitable products or advice. As a result, many consumers lack confidence in the investment market. 

'This call for input is aiming to help shape the future of consumer investments, including regulation, to ensure consumers can have faith in the market.

'We’ll be considering all contributions carefully as we open this debate on the future of the consumer investment market.'

The CFI follows recent action by the FCA in this market. For example, we imposed a temporary ban on the mass marketing of speculative mini-bonds. In June, the FCA announced proposals to make this ban permanent.

In 2014 we launched our ScamSmart campaign to arm consumers with the knowledge and tools to help prevent them falling victim to investment and pension scams.

Through our supervisory work we have taken action against pension transfer advisers where advice has been unsuitable. 

Notes to editors

• Call for Input: The Consumer Investments Market[1]
• The FCA is also developing a consumer harm campaign to help consumers make better-informed investment decisions, building on the steps already through our ScamSmart campaign. The new campaign will seek to address the harm caused from consumers investing in high risk, high return, illiquid investments that are not suitable for their needs.