The U.K.'s Financial Conduct Authority is getting tougher with firms selling investment products and retirement plan rollover advice to consumers, it said in a news release.
Over the past year it has placed twice as many restrictions on consumer investment firms as the previous year, including preventing firms from promoting and selling certain products or providing specific services such as advice on defined benefit pension transfers.
Further details were not immediately available.
The FCA also withheld authorization from 17 firms where it suspected their real purpose was to avoid the consequences of providing unsuitable investment advice, a practice known as phoenixing or lifeboating, the FCA said in a release.
Some firms given temporary permission to sell products or advice in 2021 lost that privilege in 2022, in cases where consumers were encouraged to trade excessively, the FCA said.
Sarah Pritchard, executive director of markets at the FCA, said in the release that the agency prevented 1 in 5 firms from entering the consumer investments market and issued 40% more consumer alerts about unauthorized firms.
The FCA is also ramping up efforts to detect online fraud, scanning 100,000 websites daily and acting where a scam is suspected, it said.
In July, the regulator unveiled new consumer duty rules to set higher standards of consumer protection across financial services. The new rules are effective July 31, 2023, for new and existing products and one year later for closed products or services.
Later this year, FCA officials will propose "a more appropriate advice regime" for individual savings account investors, and review "the boundary between advice and guidance," it said in the release.
