The FCA has placed restrictions on twice as many firms in the investment market compared to last year, figures published by the regulator have shown.

The restrictions, part of an FCA strategy to prevent harm in the consumer investment market, include preventing firms from promoting and selling certain products, or providing specific services such as advice on defined benefit pension transfers.

The FCA stopped 17 firms and seven individuals attempting to obtain a new FCA authorisation in the investment market where ‘phoenixing’ or ‘lifeboating’ was suspected. This is where a firm or individual tries to avoid the consequences of having provided unsuitable advice by moving to or setting up a new firm.

Figures also show the FCA stopped the UK operations of 16 contracts for difference providers, that had entered the UK’s temporary permissions regime in 2021, where suspected scam activity was detected. Without this action, the FCA has estimated that consumers could have lost around £100m a year.

“We want to see a consumer investment market where consumers can invest with confidence, understanding the level of risk they are taking, and where assertive action is taken when harm is identified,” said executive director of markets at the FCA, Sarah Pritchard.

“We know that it will take time to see the full impact of all our interventions, particularly given the worsening economic environment, but have committed to update each year on the progress that is being made.

“Setting high standards and acting quickly to crack down on problem firms will help ensure market and consumer confidence, supporting the integrity and growth of UK financial services.”

The FCA’s work forms part of its updated consumer investments strategy, which is aimed at helping people invest with confidence, while seeking to reduce the number of people who are persuaded to invest in products that are too risky for their needs and to slow the growth in investment scams.

The regulator said the actions it is taking to prevent harm in the consumer investment market are aligned to commitments in its wider three-year strategy. These include enabling consumers to help themselves, dealing with problem firms and reducing and preventing financial crime.

PIMFA, the trade association for wealth management, welcomed the FCA’s figures and head of public affairs, Simon Harrington, added: “We are particularly happy to see the FCA taking a more proactive approach against disreputable firms seeking to lifeboat and phoenix, which would otherwise further inflate the costs of the Financial Services Compensation Scheme for good firms – an issue we have repeatedly raised and campaigned on.

“In addition to keeping bad actors out of the market,  the FCA must additionally direct its efforts towards making the authorisation process more efficient and clearing its authorisation backlog over the next reporting period.

“Firms in the advice and wealth sector are still reporting a significant wait for the approval of senior manager appointments. This is having a detrimental impact on the ability of well governed, high-quality wealth and advice firms to serve the needs of UK savers.”

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