What is the FCA?
FCA stands for Financial Conduct Authority. They are an independent watchdog responsible for regulating 50,000 firms to make sure the UK’s financial market is fair. The FCA is the main financial regulatory body in the UK. The FCA determines what is defined as a financial promotion. We can guide you through advertising finance options to customers while staying compliant.
How do I find out if a company is FCA authorised?
On the FCA website. The FCA register is online and you can use it to search for either a company name or an individual. Almost all financial services companies must be regulated by the FCA. You can also use the register to find financial services companies in your area.
Improveasy is authorised as a finance broker. We provide credit facilities from a panel of lenders. We offer home upgrade companies who cannot offer finance to their customers finance solutions. Please click here to see our partnerships and companies we have offered finance options to before.
How to advertise finance options as an IAR
Most of the companies that we deal with are considered “IARs”. This stands for Introducer Appointed Representative. IARs are only authorised to provide a client introduction to a directly authorised principal firm (like us). IARs are not authorised by the FCA. This means that the IAR is unable to provide advice or explain finance options and the consumer must make an informed decision based on information provided by us. This restriction extends to marketing as well as selling procedures meaning that if an IAR wishes to advertise finance they must do so by not providing any costs, APRs, or breakdowns. However, we can advertise this information on your behalf. We can offer you assistance and advert templates.
What does the FCA define as a financial promotion?
According to the FCA handbook, a financial promotion is broadly defined as “an invitation or inducement to engage in investment activity“. Financial promotions are adverts from companies communicating financial services and products to consumers. These promotions can be in any format. They must comply with the FCA’s regulations. The number of promotions amended or withdrawn has risen significantly over the last couple of years. In May of 2022, the FCA wrote a letter to 28,000 lenders to ask them to stop using misleading terms or they would face regulatory action. All financial promotions must be fair, clear, and not misleading.
Guidance for financial promotions
Financial promotions should ensure that each communication:
a) Is clearly identifiable as a financial promotion.
b) Is accurate.
c) Is balanced and does not emphasise any potential benefits of a product or service without also giving a fair and prominent indication of any relevant risks.
d) Is sufficient for and presented in a way that is likely to be understood by, the average member of the group to which it is directed, or by which it is likely to be received.
e) Does not disguise, omit, diminish, or obscure important information, statements, or warnings.
Cash values or interest figures
Instead of providing specific examples of how much a quote will be, you should give generalised information such as: “All products now available on finance.”
You can also give examples which would apply for all customers on our joint adverts. A Representative Example would look like this: “Representative Example: Cost £1200.00 Deposit £120.00 Loan Amount £1,080.00 Monthly Repayment £22.67 Term Length 60 Months APR 9.9% Representative Total Interest Payable £280.20 Total Amount Payable £1,360.20.”
Clear status disclosure
You should always clearly state your relationship to Improveasy on your website and on our adverts that mention finance being available. You can receive the exact wording regarding this following starting work with us.
Misleading financial promotions
In their consumer advice on misleading promotions, the FCA list various questions to ask yourself when assessing adverts.
Here are some examples:
- How long do I have to commit for?
- Does the promotion make it clear who you are dealing with and who will be providing the product or service?
- Are there any penalties if I want to move my money?
The following examples are basic ads we have accepted or rejected. FCA regulated brokers are expected to determine whether or not an ad is compliant.
FCA compliant financial promotion example
This example is compliant with FCA guidelines for an IAR. It is a joint advert.
As an IAR you are unable to provide advice or explain the finance. This extends to your financial promotions. You are unable to put any cash values or interest figures as this would then require a representative example which would equal explaining the finance.
Should you wish to include a full financial promotion into your advert you will need to ensure that this information is provided by Improveasy, like in this ad, and the ad would therefore need our logo and information to be more prominent.
FCA non-compliant financial promotion example
This advert was created by a company we dealt with and we have edited out their company name and logo. This advert could fairly be seen as misleading as our name, as the FCA authorised company, was only in small print. Because of this, the advert looks like it is just coming from the shutters and blinds company, who are not authorised to put representative examples or APRs in their promotions. It looks like the shutters company is a finance broker itself. This ad would be rejected.
After this advert was edited, we ended up with this which is compliant:
You should always check with our compliance team to make sure your financial promotions are not breaking FCA rules.