Amended Definition Of Financial Advice

The government has now published its response to the consultation on amending the definition of financial advice.

The Financial Advice Market Review recommended that the government consult on changing the definition of financial advice, to give firms the confidence to give more help to their customers without fear of inadvertently crossing the boundary into regulated advice. 

Having considered responses to the consultation, the government has decided to change the definition of financial advice for regulated firms. Regulated firms will therefore be giving advice only where they provide a personal recommendation. The government will leave the wider RAO definition of advice as “advising on investments” in place for unregulated firms. This dual approach will give greater certainty to regulated firms, whilst mitigating the risk of consumers being scammed.

The response is available in full at: https://www.gov.uk/government/consultations/amending-the-definition-of-financial-advice-consultation

The FCA have published an accompanying explanatory note available at: https://www.fca.org.uk/firms/financial-advice-market-review-famr/changes-regulated-activities-order