Contact State bangs the drum for greater scrutiny of financial promotions, because it matters. If a consumer goes online to seek out a mortgage, insurance, investment or retirement product, it may end up being one of the biggest, most important purchases of their lives.
We think that If a lead generator is involved in introducing a consumer to a regulated product provider or intermediary, they are effectively undertaking a regulated promotion. If you accept the premise of that argument, there are two possible options:
- The lead generator should become Directly Authorised (DA) by the FCA so that the liability and onus for financial advertising is on the advertising firm and can be clearly identified and traced by consumers.
- The lead generator should become an Appointed Representative (AR) or an Introducer Appointed Representative (IAR) of an already directly authorised firm. In this manner the lead generator is ‘borrowing’ the regulatory authority to run a regulated financial promotion.
The FCA intends to change the rules around financial promotions and we’re all waiting patiently to see what the outcome of the most recent consultation will be. In the meantime Contact State has become aware that some DA firms and DA networks have begun preempting the outcome of those consultations and are making their lead generation partners ARs or IARs.
This is potentially hazardous.
By granting these permission the firms and networks in question are accepting liability for the adverts that are run in their name without real time control. Delegating your regulatory authority (liability) through the AR/IAR mechanism to a lead generation firm whilst also having no reliable and accurate means of monitoring the financial promotions themselves, is like handing the keys of your shiny new car to a underage, drunk driver. Maybe you’ll get your car back in one piece, maybe you won’t, what's certain is you’ll have absolutely no control.
We believe that all regulated lead generation activity should be independently certified, to provide a clear real time audit trail of what actually happened on the customers online journey. This is a simple mirroring of regulated call recording.
Handing out these sensitive regulatory instruments without real time control is dangerous to the health and status of your business.