How To Spot A Rogue Financial Advisor

Dealing with firms without an authorisation to give financial advice can cost investors their life savings.

The Financial Conduct Authority publishes a list of more than 3,000 firms trading without permission in the UK – and warns that dealing with them means investments are not protected by the Financial Ombudsman nor the Financial Services Compensation Service if they go wrong.

To help investors identify they are dealing with a licensed and regulated adviser, the FCA has a list of hints:

  • Check the firm is on the FCA register of authorised intermediaries – if not, call the FCA on 0800 111 6768.
  • Ask the adviser for the firm’s FCA reference number, but only call back on the number listed on the FCA register
  • Pull up the FCA web site from a direct link, not one supplied on a letter or email by an adviser which could be a clone site
  • Don’t forget cold-callers are more than likely scammers
  • Check the list of warnings about unauthorised firms
  • Check warnings from overseas regulators about rogue firms
  • Never agree to pay any money or sign contracts with a firm if you are not sure if they are authorised. A properly authorised firm will always give you time to carry out inquiries before entering into any agreements

“Only authorised firms are allowed to offer financial services and many try and get around the rules by setting clone web sites of bona fide companies or providing false details,” said an FCA spokesman.

“People can check out whether a firm is authorised on our web site. If they are suspicious about a firm, they can always call our consumer helpline on 0800 111 6768.

“Many of these bogus firms are based abroad to try and escape detection and prosecution in the UK.”

Warnings about bogus advisers

  • Grants Limited/ The British Business Fund

Dealing with an unregulated firm

If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.

Checking if a firm is regulated

Go to the Financial Services Register to check if a firm is regulated in the UK.

Reporting a suspected bogus adviser

Find out how to report unauthorised advisers on the FCA web site