Context
The Government announced in 2022, plans to fundamentally review how the boundary between advice and guidance on investments is operating. This review will be carried out by the FCA, in conjunction with the Treasury, as part of the Edinburgh Reforms. The FCA have published a webpage highlighting the different ways FCA-authorised firms can support consumers under the existing regulatory framework, drawing from existing rules and guidance, pending any changes that might be implemented following its review.
Key points to note
To assist firms, the FCA sets out examples of where regulated firms can support consumers without inadvertently providing a personal recommendation.
The guidance contains examples of when support given to retail customers will not qualify as a ‘personal recommendation’ and on how to comply with the consumer duty. While the guidance itself appears to focus on investments, it is also relevant for regulated non-investment activity.
A common theme in the examples is the need for firms to provide a customer with more information around the choice they are considering. This includes information about product features to be aware of, what the product may best fit their needs, or highlighting other options for consideration. The information and examples provided by the FCA are collated under the following sections:
- Why the right support for consumers matters.
- Understanding the advice boundary as it applies to a regulated firm.
- When advice or support is not a personal recommendation.
- Interaction with the Consumer Duty.
The FCA has liaised with the Financial Ombudsman Service (FOS) over this guidance and the FOS has confirmed that this guidance will be taken into account when customers bring complaints around the support they have received in this area.
Links to the relevant sections of the FCA’s Perimeter Guidance Manual can be found at the bottom of the webpage.
Next actions
None – for information and awareness.