The complete guide to FCA financial promotions rules for wealth managers

COBS 4 sets out the FCA's requirements for financial promotions — the rules that govern how regulated firms communicate with retail and professional clients about financial products and services. For wealth managers, understanding these rules in detail is essential.

The core requirement is that financial promotions must be fair, clear and not misleading. This sounds simple, but the FCA's interpretation of this standard is detailed and nuanced. A promotion can be technically accurate but still misleading if it emphasises benefits without giving appropriate prominence to risks.

For wealth managers, the most common areas of non-compliance are: performance claims that don't include appropriate risk warnings; comparisons with benchmarks or competitors that aren't fair or meaningful; and descriptions of investment strategies that overstate certainty or understate risk.

The FCA's Consumer Duty has added a further layer of requirements. Firms must now demonstrate that their financial promotions are designed to support good customer outcomes — not just avoid misleading customers. This requires a more holistic assessment of whether promotions help customers make informed decisions.

Practically, this means compliance teams need to review financial promotions against both the specific rules in COBS 4 and the broader Consumer Duty standard. AI-assisted review can help with the COBS 4 rule-checking, but the Consumer Duty assessment requires human judgement.

The key rules to focus on are: COBS 4.2 (fair, clear and not misleading); COBS 4.5 (past performance); COBS 4.6 (projected performance); and COBS 4.7 (risk warnings). Each of these has detailed FCA guidance that should be reflected in your compliance review process.