FCA warns on complex financial products

Date: 18th April 2019
Author: BETTER FINANCE

Wanda Goldwag, the new chairwoman of the UK regulator’s Financial Services Consumer Panel has spoken about a “plethora” of products in the market that consumers do not understand, and advisers fail to properly explain. The panel was created in March, with the aim of advising the Financial Conduct Authority (FCA) on the interests and concerns of consumers in its policy development.

Speaking to the FT Financial Adviser, Ms Goldwag praised the pension freedom reforms but warned that with greater choice came the need for “very good” advice. According to her, “there has been a great deal of mis-selling of products, but also a great deal that are far too complex and not well explained. Including being not well explained by advisers.” The FCA is now implementing a product governance element of Mifid II, aimed at making sure advisers are providing their clients with suitable solutions by requiring product manufacturers and distributors to identify target markets.