PIMFA
Press Release
18 June2020
PIMFA welcomes proposed permanent FCA marketing ban for mini-bonds
PIMFA, the trade association for the wealth management and financial advice industry, welcomes the Financial Conduct Authority’s (FCA) announcement today that it intends to make the ban on marketing of so-called mini bonds, introduced in January, permanent.
In an era of ultra-low interest rates it is understandable that some consumers will be attracted by investments that purport to offer returns far in excess of the rest of the market but the risk that such investments carry is often much higher than those invested in them are aware of. All too often consumers are told such investments are low risk, while offering high returns. Moreover, such products are not always marketed to sophisticated or high-net-worth investors. More often they are marketed to those on lower incomes or inexperienced savers.
Tim Fassam, Director of Policy and Government Relations at PIMFA, commented: “PIMFA has been concerned about the marketing of mini-bonds for some considerable time and there have been a number of notable examples of consumers being ill-treated. The announcement today from FCA that it intends to permanently ban the marketing of mini-bonds, as well as extending this to listed illiquid assets is welcome.
“It cannot be right that 14,000 people who invested in an Individual Savings Account (ISA), with London Capital Finance (LCF) for example, are now having to seek compensation, which well-run firms will pay through the Financial Services Compensation Scheme (FSCS) levy.
“PIMFA has repeatedly called for the marketing of these types of investments to be banned outright. The fact that this hasn’t happened sooner has, by its own admission, meant the FSCS has had to budget £45m to compensate consumers. This could have been avoided and goes right to the heart of the debate over the current limits of FCA supervision.”
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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.
·Further information can be found at www.pimfa.co.uk
·To become a member of PIMFA for access to training, benefits and discounts, please visit https://www.pimfa.co.uk/become-a-member or contact us directly at membership@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
