Government reverse changes to financial promotion exemptions

Nicholas Hyett, Investment Manager at Wealth Club, commented;

“It’s great to see the government responding to feedback and reversing recent changes to rules around high net worth and sophisticated investor exemptions. The changes risked reducing investors’ ability to back small UK start-ups, very much the opposite of current government policy, and implementation has also been poor.

The lack of alignment with the FCA HNW High Net Worth tests made new thresholds difficult to implement and meant investors were being treated differently depending on the way in which they accessed certain information. The industry also raised concerns about whether the impact of the changes on investor diversity had been properly assessed.

However, the government has said that the exemptions remain under review. With angel investing changing substantially since the current criteria were originally introduced, some future changes would not be a surprise. The lesson from today is that any changes need careful consultation and a joined-up approach across government if they’re going to be deliver the intended benefits without unintended consequences.”