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FCA Financial Promotion Rules: What's Changed and What You Need to Do

A practical walk through the FCA's overhauled financial promotion rules: Consumer Duty, high-risk investments, crypto and the section 21 gateway.

The FCA has spent the past two years rebuilding the financial promotion rules. If you are an authorised firm, or you approve promotions on behalf of anyone else, you are caught by this. What follows is what changed, who it applies to, and what to do about it before someone asks.

What counts as a financial promotion?

Any communication that invites or induces someone to engage in investment activity. The definition is broader than most people assume. It covers:

  • Website content
  • Social media posts
  • Emails and newsletters
  • Brochures and flyers
  • Google ads
  • A WhatsApp message to a client, yes, that too

If it could nudge someone towards buying a financial product, treat it as a promotion and sleep better.

What's changed?

Consumer Duty (July 2023)

The one that changed everything else. Every promotion now has to support good customer outcomes:

  • Clear, not clever. No burying the fees in the small print
  • Fair value. If you cannot demonstrate it, do not promote it
  • Right audience. The targeting has to match who the product actually suits
  • No pressure tactics. Urgency and scarcity claims are firmly under the microscope

The FCA reads your promotions as evidence of whether you are meeting the Duty at all. A misleading advert is not only a promotion breach. It is a Duty breach, and it invites questions about everything else you do.

High-risk investments (2023–2024)

Stricter rules for anything the FCA considers “high risk”:

  • Personalised risk warnings.The generic paragraph at the bottom is no longer enough
  • Client categorisation.Investors must be classified before they see the promotion
  • Cooling-off periods. Time to think again before committing
  • Banned incentives. No referral bonuses, no new customer offers

Applies to: speculative illiquid securities, peer-to-peer lending, certain crowdfunding.

Crypto and digital assets (October 2023)

Crypto promotions came inside the perimeter. A good number of firms did not see it coming, which was itself informative.

  • Must be issued or approved by an authorised firm
  • Prominent risk warnings required
  • No misleading claims about returns
  • Cooling-off period for first-time investors

The s21 Gateway (February 2024)

Previously, any authorised firm could approve promotions for unauthorised firms under s21 of FSMA. Now you need specific FCA permission to do this. The “gateway” restricts who can approve others' promotions.

If you are a principal firm approving your ARs' promotions, you are very likely fine. ARs are not unauthorised persons for these purposes. If you've been approving promotions for third parties outside your AR network, check whether you hold the permission to do it. Several firms discovered they did not, rather late in the day.

What you need to do

1. Audit your existing promotions

Everything currently live: website, social, email templates, brochures, paid ads. Check each one against the new standards and write down what you found, including the items that passed.

2. Update your approval process

Who reviews a promotion before it goes out? Is there a sign-off trail with a name and a date on it? Could you produce the approval for a promotion from eighteen months ago? The FCA expects a real process, not a quick skim before someone hits publish.

3. Train your team

Marketing, sales, advisers, anyone at all who communicates with clients. They need to know what counts as a promotion, what the rules ask for, and when to stop and escalate. Most breaches start with somebody who did not realise they had made one.

4. Monitor on an ongoing basis

Promotions are not set and forget. Staff social posts, third-party content, website changes, and your ARs' promotions if you are a principal. You want a system that catches these before a consumer complaint does.

What happens if you get it wrong?

The FCA is not messing about here. Recent enforcement has included:

  • Fines in the millions for misleading promotions
  • Banning orders for individuals
  • Requirements to contact affected customers
  • Forced withdrawal of products

And under the Duty, a promotion breach rarely stays a promotion breach. It becomes a question about your culture and your governance, which is a far longer conversation.