PIMFA calls for clarity on cold calling ban and public awareness campaign 

27 September 2023

 

PIMFA calls for clarity on cold calling ban and public awareness campaign 

PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, has urged HM Treasury (HMT) to provide a clear definition of client relationships in its response to the government’s consultation on banning cold calling for all financial services products.

 

Currently, the cold calling ban only applies to pension products, but HMT is seeking to extend the ban to all financial services products.

 

While PIMFA broadly welcomes the ban and recognises that unsolicited calls in relation to financial services and products have the potential to cause serious harm to consumers and put them at risk of fraudulent or scam phone calls, it is concerned that the definition of a “client relationship” is not as clear cut for the investment industry as others, and there is potential for firms to be caught out by the cold calling ban, despite contacting existing customers.

 

The relationship between investment managers, wealth managers and financial advisers and their clients is, by its very nature, long-term, meaning clients may not have regular interactions with their wealth manager or financial adviser.

PIMFA believes such relationships need to be provided for within the forthcoming ban and would even be willing to work with the HMT to provide specific wording to ensure such longer-term client relationships are protected within the ban.

PIMFA would also like to see the Government undertake a public awareness campaign to ensure consumers are made aware that should they receive a phone call offering them a financial service or product, they know it is likely to be fraudulent or a scam.

At PIMFA’s recent Compliance Conference, the Government’s anti-fraud champion, Anthony Browne MP, told delegates the officials were working with telecoms companies to try to reduce the number of scam phone calls the public receives and that most, if not all, telecoms companies have signed up for the Government’s Fraud Prevention Charter.

But as official figures show 41% of all crime in the UK is fraud with more than 3 million people and businesses a year becoming victims of scams, and more than 70% of fraud is generated abroad.

Maria Fritzsche, senior policy adviser at PIMFA, commented: “Banning cold calling of all financial services and products is an important step in protecting the public from fraud and scams and may help the Government achieve its target of reducing fraud by 10% on 2019 levels by December 2024.

“But we do have concerns that the definition of a client relationship isn’t as clear as it could be and may capture legitimate firms who simply want to contact their existing client but may not have spoken to them in a while.

“We also think it is vital that the ban on cold calling for financial products and services be accompanied by a strong public awareness campaign to educate the public about the new ban and ensure they understand that if they receive an unexpected call offering them a financial product or service, it is almost certainly a scam, and they should hang up the phone.

“This, together with stricter rules on the promotion of crypto-assets and the Online Safety Bill having passed its final reading in the House of Lords, will mean there are more protections for consumers than ever before. But in putting in place those protections, we should be careful not to prevent legitimate firms from contacting existing clients to discuss products or services that may be genuinely beneficial for them.”

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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, 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

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