The FCA has updated its webpage on investment advisers’ and authorised firms’ responsibilities when accepting business from unauthorised introducers or lead generators.

The update notes that many authorised firms receive customer instructions from unauthorised introducers, lead generators and/or other authorised firms (introducers). The FCA is concerned at the increase in cases in which the introducer has an inappropriate influence on how the authorised firm carries out its business: in particular, where the introducer influences the final investment choice. In addition, the FCA has concerns where the authorised firm delegates regulated activities.

The FCA reminds authorised firms that they must meet their regulatory requirements when they accept business from introducers. Authorised firms must, at all times, maintain full and complete ownership of the advisory process between their firm and the customer. If customers are given unsuitable advice by an introducer, the authorised firm may be held responsible for this, and subject to regulatory action.

Firms are warned to be aware since the FCA is co-ordinating its intelligence and supervisory activities on pension scams and unsuitable advice, and will take action as necessary. It is recommended, among other measures, to carry out robust due diligence on introducers, have in place a robust vetting system and review the adequacy of controls in place to ensure independence.

A copy of the updated webpage is available.