When financial professionals speak of unregulated investments, they’re often referring to products outside the scope of the Financial Conduct Authority’s (FCA) regulatory perimeter. But here’s the catch: just because an investment isn’t a collective investment scheme or doesn’t fall under FCA supervision doesn’t mean it exists in a lawless void.
There’s an entire world of investment activity beyond the FCA’s boundaries—a world that remains governed by other frameworks, laws, and oversight mechanisms. Yet for those operating squarely within the FCA’s perimeter, this can be difficult to grasp.
And it matters.
According to the ONS Wealth and Assets Survey, the investments regulated by the FCA represent less than 5% of total UK wealth. The FCA world, in truth, is just a small island in a vast financial ocean. If we don’t acknowledge this broader ecosystem, we risk misunderstanding both the opportunities and the risks that lie beyond.
A Case in Point: ULEZProsperity
Consider a recent ruling by the Advertising Standards Authority (ASA) against Rosenthal Capital, trading as ULEZProsperity—a company promoting investment returns from vehicles compliant with London’s Ultra Low Emission Zone (ULEZ).
The company invited customers to purchase cars and rent them to ULEZProsperity for a fixed monthly return over 37 months, marketing “short-term high-yield returns” of between 21% and 23.72%.
When challenged, ULEZProsperity defended its claims by stating it wasn’t offering a product regulated by the FCA. And they were right—from a purely FCA lens, the scheme didn’t qualify as a regulated financial product.
But regulation is never a single lens.
The ASA—the UK’s advertising watchdog—upheld the complaint, ruling that the company’s claims were misleading and unsubstantiated. The ASA required the company to withdraw the advert and prohibited it from making such claims without robust evidence in the future.
Misunderstanding ‘Regulated’
This case highlights a critical misunderstanding: regulation doesn’t stop at the FCA’s perimeter. There are multiple layers of oversight in UK financial life:
- Advertising regulations (via the ASA and CAP Code)
- Consumer protection laws (via the CMA, Trading Standards, and others)
- Contract law and civil recourse
- Sector-specific regulations (e.g., transport, real estate, energy)
An investment may not be FCA-regulated but is still subject to these other frameworks. Promotion of financial returns, for example, invokes strict advertising rules requiring substantiation, clarity, and fairness—whether or not the FCA is involved.
Many FCA-regulated professionals find it hard to accept that investments outside their sphere may still be legitimate, compliant, or regulated in a different way. Conversely, they may also overlook the potential for misleading claims or consumer harm arising in these alternative markets, assuming regulation is absent when in fact it’s simply different.
The Bigger Picture
With less than 5% of UK wealth held in FCA-regulated retail investments, it’s vital that financial professionals—and consumers—understand the broader regulatory ecosystem.
The FCA world is not the world.
There’s a rich diversity of investment types, structures, and oversight bodies beyond its remit. Navigating this wider landscape calls for clarity, openness, and education, rather than assuming all ‘unregulated’ investments are inherently rogue or illegitimate—or, equally dangerously, free from accountability.
In the case of ULEZProsperity, the regulatory challenge didn’t come from the FCA. It came from the ASA. And in other cases, it may come from other authorities entirely.
As we push for greater financial literacy, consumer empowerment, and ethical practice across all investment domains, it’s critical we recognise and respect the whole regulatory picture, not just the part within our familiar boundaries.
Because outside the FCA’s perimeter isn’t the Wild West—it’s simply the wider world.
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