FCA launches crackdown on rogue advisers

MORE than 100 financial advice firms are being investigated by the City watchdog as part of a sector-wide crackdown, figures revealed.

The Financial Conduct Authority (FCA) launched a two-year campaign to stop unsuitable advice, investment scams and excessive fees with a warning to firms earlier this year.

it was prompted by concerns that too many pensioners were being advised to move their cash out of gold-plated retirement schemes and into riskier investments.

Fears that desperate savers could be hoodwinked by rogue advisers have also escalated during the coronavirus crisis, which has caused turmoil on stockmarkets and draggged down returns on cash as interest rates have been cut.

And yesterday the FCA confirmed it is carrying out enforcement probes into 107 advice firms, underlining the scale of the crackdown. The FCA can launch these investigations if it suspects misconduct, wants to change regulatory permissions or wishes to check that a firm is acting properly. The blitz of investigations suggests the FCA is ramping up pressure on financial advisers.

Around 130 advice firms were investigated in the whole of 2019, whereas the figure for 2020 only covers up to last month. in a ‘Dear CEO’ letter to the sector in January, the watchdog said it was concerned about a growing number of cases where people received unsuitable advice and became victims of investment scams, firms not compensating customers for wrongdoing and customers being asked to pay excessive fees.

As a result, the FCA vowed a two-year crackdown which will see it focus attention on advice firms and encourage good practice.