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UK watchdog warns financial firms over unauthorised introducer firms

Tuesday, August 2, 2016 - 20:53
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Britain's markets watchdog warned financial firms on Tuesday they could be fined for improper use of unauthorised introducer firms which provide client leads as the regulator roots out pension scams.

[LONDON] Britain's markets watchdog warned financial firms on Tuesday they could be fined for improper use of unauthorised introducer firms which provide client leads as the regulator roots out pension scams.

Financial firms have long accepted business leads from "introducers" or unregulated firms, or people such as retired financial advisers who are no longer authorised themselves to give advice on products.

The Financial Conduct Authority (FCA) issued an alert on Tuesday saying it was very concerned about the increase in cases of introducers having inappropriate influence on firms who actually sell products like pensions.

"An authorised firm which accepts business from an introducer must meet its regulatory requirements," the FCA said in a statement.

"If customers are given unsuitable advice by an introducer, the authorised firm may be held responsible for this and subject to regulatory action."

The FCA said many of the authorised firms it visited did not have proper control over advice they are ultimately responsible for, such as on switching and transfer of pensions.

"We have specific concerns where this advice involves movement of pension pots to unregulated, high risk, illiquid products, whether they are based in the UK or overseas," the FCA said.

The watchdog told firms it was coordinating its supervisory activities on pension scams and will take action as necessary.

"It will be you and your firm against whom regulatory action will be taken, and there is also a risk that you may become involved in an illegal scheme."

REUTERS