The regulator, in its study of Financial Promotions, found a drop in the number of high-risk promotions, but conceded that there had only been limited improvements in the general insurance and non-conforming mortgage sectors.
As part of its study, the FSA evaluated over 1,000 Financial Promotions over a two-year period, and visited 55 firms to assess their systems and controls.
Vernon Everitt, retail themes director at the FSA, said: “We continue to see variations in standards across different sectors, but overall we have seen improvement over the last two years.
“But we must see further progress. Responsibility for ensuring that customers are given clear and straightforward descriptions of financial products and services lies squarely with the senior management of the firms selling them. So while our shift away from detailed rules towards a more principles-based approach will allow firms the freedom they need to market effectively, senior management also needs to put in place the right checks and balances to ensure that customers are being treated fairly.”
In its efforts to improve Financial Promotions capability among firms, the FSA has published guidelines, including indications for firms to assess financial promotions strategies, ‘Treating Customers Fairly’, and training and competence. It also admitted it would be targeting direct mail, internet promotions and brokers as part of its future work.
Rob Griffiths, associate director at the Association of Mortgage Intermediaries (AMI), said: “We will be publishing a factsheet for members on non-conforming Financial Promotions, following on from the concerns the FSA raised. Brokers must ensure they are complying with FSA Financial Promotions guidelines. The FSA has made it clear it will be looking specifically at intermediaries in its future work on the issue.”
