How many consumers navigating the increasingly complex financial advice spectrum, have checked or even heard of The Financial Service Register when actively seeking out firms to manage their life savings? It is likely to be a very small percentage. Therefore, less financially-savvy individuals taking unsolicited calls from financial firms are even more unlikely to be aware of its existence.
The Financial Service Register is a searchable database of advisers, who are authorised and regulated by the Financial Services Authority (FSA).
The regulator launched a little known campaign last year called ‘Scam Smart’. The campaign was intended to warn consumers of the huge risks associated with dealing with unauthorised financial services firms. It advises consumers to be on the lookout for obvious warning signs of financial fraud and encourages them to check the Financial Conduct Authority (FCA) Warning List, reject cold calls and to seek impartial financial advice.
Clearly the campaign was not far reaching enough. Last week, the Citizens Advice Bureau (CAB) released a report claiming that consumers miss almost 90% of the warning signs that could expose an investment proposition as a scam.
As certain consumers continue to struggle to get to grips with what is a legitimate and viable investment opportunity and what is an out-and-out scam, the FCA’s plans to roll out an updated Scam Smart campaign over 2016/17 which will include advertising and additional information is well overdue.
Even with the FCA’s illustrious plans for a revamped Scam Smart, is enough being done to smoke out these fraudsters? CAB clearly doesn’t think so and is rightly calling on financial advisers, the regulator and providers to take responsibility for helping to stop people falling foul of fraudsters.
Promotion of the Financial Services Register needs to be key to any awareness campaign. Not only does the Register hold information on whether a firm is authorised, but also whether or not certain individuals are authorised. It also enables consumers to check whether a firm has the relevant permissions for performing specific tasks. With advisers set to campaign for this information to become more accessible and jargon-free, the hope is that more consumers can better understand what all the different permissions mean, and become aware that the Register actually exists.
Figures released by the Office for National Statistics have revealed that as many as 10.9 million consumers have received unsolicited contact about a pension since April 2015, clearly evidencing that the problem of financial fraudsters is unlikely to stop any time soon. Let’s hope the recent campaign launched by IFAs to promote The Financial Service Register along with the additional Scam Smart push is sufficient to help consumers avoid the many traps set by fraudsters.