‘Little reason to hold back decision on type of advice’
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In focus: Future of Independence
Responding to the FSA’s finalised guidance on restricted and independent advice, Gill Cardy, managing director of the centre, said the document confirms it is the firm rather than adviser that is responsible for due diligence.
She said: “The clarification provided on the validity of a ‘team approach’ to advising clients will be welcomed by those firms who have teams working together to enable clients to benefit from the expertise of specialists. This also provides the possibility of a very positive, although non-advisory, role for those advisers who do not plan to pursue a level-four qualification.”
Ms Cardy said it was now clear that a firm could refer a client to another restricted business as long as there is no advice given. She added: “Now there can be little reason for firms to continue to delay the decision whether to offer independent or restricted advice services post 2012.”
The FSA said it received 17 responses to its initial consultation in February, with some concerns raised about the types of financial products that had to be recommended, how referrals would operate and the differences between the FSA’s and MiFID directive’s definition of independence.
The regulator said a firm’s independent status would not be affected if it referred clients for pension transfer or long-term care products.
It said: “Such firms can also make internal or external referrals for advice on non-retail investment products. If a firm does not provide any personal recommendations on retail investment products to a client, and refers them to another firm instead, including to a firm providing restricted advice, this will not affect its independent status.”