A recent article in Money Marketing took aim at so-called “unregulated advisers,” lumping together financial coaches, finfluencers, and other professionals operating outside the FCA’s regulatory perimeter. The commentator suggested these individuals pose a serious threat to consumer protection, implying that their activities are inherently riskier than those of FCA-regulated advisers.
This argument is, at best, misinformed and, at worst, misleading.
First, a crucial point of clarification:
Those operating outside the FCA’s perimeter are not unregulated. Financial coaches and similar professionals fall under the oversight of the Competition and Markets Authority (CMA), which enforces standards to protect consumers from unfair practices. Furthermore, many of these professionals—particularly within credible networks like the Academy of Life Planning—hold high-level qualifications. In a recent poll of our Academy members, 75% reported being qualified to QCA Levels 6 and 7. They are not only highly trained but also bound by the stringent codes of conduct set by their respective professional bodies.
The scale of harm: setting the record straight
The commentator argued that even when things go wrong with FCA-regulated advice, the outcomes tend to be “limited in scale.” To support this, they referenced the British Steel Pension Scheme (BSPS) scandal, dismissing it as “significant harm, but to a relatively small group of individuals.”
Let’s unpack that.
- The BSPS had around 130,000 members.
- Around 7,834 steelworkers transferred their pensions out of the scheme, with £2.8 billion in total being moved—often following advice from FCA-regulated advisers.
- Shockingly, 47% of the advice reviewed was found to be unsuitable, and 32% was “unclear” in terms of suitability.
- The average loss per individual was estimated at £82,600, with some losing up to £489,000.
- As of mid-2024, more than £100 million in redress has been offered, covering 1,870 individuals who suffered significant financial harm.
Is 1,870 people—many of whom lost their retirement security—really a “relatively small group”? To those individuals and their families, this was catastrophic. And let’s not forget: this scandal arose squarely within the FCA-regulated sector.
The missing scandals
By contrast, when was the last high-profile scandal involving financial coaches? Where is the evidence of systemic consumer detriment in the financial coaching space? It’s telling that no such scandals dominate the headlines. That’s not to say the sector is perfect—no area of financial services is—but the data doesn’t support the idea that financial coaching is a wild west of consumer harm.
The real issue: understanding conduct risk
It is vital we stop conflating regulation with the absence of risk. Regulation, while essential, does not guarantee good outcomes. The FCA itself has been criticised for delayed action and poor oversight in the BSPS case. Meanwhile, financial harm is often caused by poor conduct—whether within or outside a regulatory framework.
In the current environment, even FCA-regulated “finfluencers” can mislead consumers, creating client detriment that escapes scrutiny until too late. We must ensure that media commentary—and indeed policy focus—targets actual conduct risk, not just regulatory box-ticking.
The highest levels of conduct risk often sit in areas where complexity, opacity, and conflicts of interest intersect—like pension transfers and high-commission products. That is where regulators need to focus their attention and resources.
A call for accuracy and fairness
We need honest conversations about consumer protection. Mischaracterising financial coaches and lumping them with social media personalities may make for punchy headlines, but it does little to advance public understanding or safety. Instead, let’s look at the facts, examine where harm is actually happening, and ensure that regulation is applied proportionately and where it’s most needed.
After all, protecting consumers means tackling the real risks—not just the perceived ones.
Your Money or Your Life
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