The FCA has issued two new documents that are important for firms selling products using a simplified advice or non-advised sales process.
The new Guidance Consultation GC14_03 entitled ‘Retail Investment Advice: Clarifying the boundaries and exploring the barriers to market development’ which can be located here attempts to explain the boundaries between full advice, limited advice, focussed advice, simplified advice, non-advice and execution only. It also explains when generic advice becomes regulated advice and the difference between advice and giving information.
The document summarises the existing regulatory regime and distribution models and, to name but a few, the T&C, Appropriateness, Suitability and Adviser Charging requirements.
Additionally, tying into other recent documents issued concerning complex products held in SIPP wrappers, it summarises when the appropriateness test needs to be applied for a client wishing to purchase a complex product without receiving advice.
The Thematic Review document TR14_10 ‘Developments in the distribution of retail investments: Purchasing investments without a personal recommendation or with simplified advice’ which can be located here provides further useful information for those firms who allow customers to purchase investments without a personal recommendation (execution-only).
Finally, for further reference, in March 2012 the FCA issued Final Guidance document FG 12_10 here regarding simplified advice; those firms undertaking simplified advice processes should understand this document.