PIMFA warns of ‘halo effect’ from FCA marketing rules for crypto-assets

 8 June 2023

PIMFA warns of ‘halo effect’ from FCA marketing rules for crypto-assets

PIMFA, the trade association for wealth management, investment services and the personal investment and financial advice industry, has raised concerns about the Financial Conduct Authority’s (FCA) proposals regarding the marketing of crypto-assets, specifically their classification as Restricted Mass Marketed Investments (RMMI).

 

David Ostojitsch, Director of Government Relations and Policy at PIMFA, commented: “While it is right that the Financial Conduct Authority (FCA) has sought to provide clarity around how crypto-assets are marketed – and where they fit in the financial promotions regime – we do have serious concerns around their classification as Restricted Mass Marketed Investments (RMMI).

 

“Classifying crypto-assets in such a way runs the risk of creating a ‘halo effect’ that may benefit some associated digital assets, leading consumers to assume they are safe assets to invest in or covered by some form of redress if consumers lose money. Neither is true.

 

“There is clearly a future role for crypto–assets, but only if they are marketed appropriately and to the right people. Crypto-assets are not regulated, are highly volatile and therefore high risk and should only be invested in by sophisticated investors that understand the risk they are taking, not mass market investors. There is a significant danger here that consumers will assume crypto-assets are safe because they are being marketed by an FCA-regulated person or firm. Again we would stress this is not the case.

 

“We are also disappointed that given the negative sentiment expressed by the industry to these proposals, the FCA has decided to go ahead with them regardless.”

 

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA has been named one of the best places to work in the UK. Find our more here.
• PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients,has bee providing responsible stewardship for their long-term savings and investments. 
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, Future of Supervision and the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376 / +44 (0) 7843 903258

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225