What advice options can I choose from?

The FCA have outlined a new advice landscape:

So how will I describe my services?

The FCA has redefined the distribution marketplace according to how advice is given – not by a category of adviser, such as Independent, Direct Sales, Tied or Multi–Tied. This means there will be advisers who may provide independent advice and those which provide restricted advice. If restricted advice is offered, the adviser must explain to the customer the nature of the restriction. The advice offered may be restricted by offering a product from a limited range, e.g. only packaged personal pensions, or by the areas of advice which will not be considered, eg pension transfers.

What is the difference between independent and restricted advice?

Independent advice

The FCA has stated that to give independent advice advisers will need to evidence they provide:

The responsibility falls on advisory firms to ensure that they meet both the criteria and conditions attached to independent status. The term “unbiased” suggests that advisers should not be subject to any form of influence (financial or otherwise) which may affect the selection of a product. The term “unrestricted” means that advisers must consider the suitability of all retail products which may be suitable in meeting a client’s needs. A new handbook definition of retail investment products will reflect the wider range of products that would need to be considered within a “relevant market”. The exemption that currently exists for group personal pensions business will still remain. This will continue to allow an adviser, who is advising a client on the merits of joining a group pension scheme to which their employer contributes, to describe their advice as independent even though they would not be actively analysing the suitability of all other retail investment products.

Restricted advice

This will include all forms of advice which do not satisfy the “independence test”.

This will apply when addressing a limited range of needs perhaps using a simplified advice process or where customers’ needs are met through a limited range of products. Before providing this service the regulations require advisers to declare the limitation of advice (both orally and in writing).

Independent Advice Only



Restricted Advice Only



Combined Advice — Independent and Restricted Advice



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