11 January 2020

PIMFA welcomes FCA warning on crypto-assets but calls for more to be done to protect consumers

PIMFA, the trade association for the wealth management and financial advice industry. welcomes the warning from the FCA to consumers about the risks of investing in crypto assets but calls for more to be done through the regulation of financial promotions and the upcoming Online Harms Bill.

Tim Fassam, Director of Govenrment Relations and Policy comments: “We fully support the Financial Conduct Authority (FCA) warning consumers about the dangers of high-risk investments that individuals may not fully understand. But we do not think warnings of this nature go far enough to protect consumers from bad actors, particularly during a period of economic hardship that many families may be experiencing due to the continuing COVID pandemic.

“For some people desperate for a quick and easy solution to their own financial turmoil, crypto-assets might look attractive but they are extremely high-risk and highly volatile investments that we would argue only the most sophisticated of investors should consider. These are unregulated investments and not all organisations that offer such investments, do so with the best interests of their customers in mind.

“PIMFA urges the Regulator to take action to more tightly control financial promotions. While we broadly support the idea that consumers should educate themselves about investments and understand the risks involved, the spread of online financial promotions means that consumers are at far greater risk of scams than they have ever been.

“Towards the end of last year PIMFA called for financial promotions to become a regulated activity. PIMFA also strongly believes that the forthcoming Online Harms Bill should include financial services to provide greater protection for consumers. Both of these reforms would provide a far greater level of protection for consumers. Without this greater level of protection, we run the risk of financial promotions, particularly online financial promotions, escalating out of control and thousands of potentially vulnerable consumers being exploited.”

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

  • PIMFA is the trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
  • The sector currently looks after £1.5 trillion in private savings and investments and employs over 55,000 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, providing responsible stewardship for their long-term savings and investments.
  • 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.

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