I notice that some financial services firms are authorised by the Financial Conduct Authority while others are not. Should this influence my decision whether or not to use them?
When considering using any Financial Service Provider, a key consideration is whether that firm is authorised by the Financial Conduct Authority (FCA). (Businesses can either be Directly Authorised in their own right or may be authorised indirectly as an “Appointed Representative” of another Directly Authorised firm, which is known as the Principal Firm or Network, e.g. our sister company, Richdale Brokers and Financial Services Ltd).
There are various benefits to working with an authorised firm which would make it highly recommended to only work with such businesses. These include the comfort you can take:
that the business has undergone a rigorous assessment of their operations by the FCA, (or by their Principal firm), prior to the business obtaining authorisation; that the business must constantly adhere to strict regulatory processes to ensure the services they provide you with are appropriate, and provided in a manner which is fair, clear and not misleading; and that should the business have fallen short in the quality of the service that they provided you with, you are likely to be able to refer this to the FOS and potentially seek recourse from the FSCS.
This is especially important when it comes to investment funds and syndicates, where a recent proliferation in the number of scams, has made it of crucial importance that you carefully research and only work with, appropriately regulated firms.
It is important to conclude by adding, that although a business which is not appropriately authorised may be committing a criminal offence if they provide you with a service which requires authorisation, it should also be noted that the specific requirements for FCA authorisation are complex, as they are very specific to the activity being performed by the business.