Post RDR/RFA we are now seeing a growth in the emergence of execution-only propositions or non-qualified employees being used to provide market views and or guidance without advice. These services are sometimes called an ‘information only’ or ‘non-advice’ service. Whilst these propositions clearly state that they are not offering advice, regulators (FCA/GFSC/JFSC) are growing increasingly concerned that some may be overstepping the boundary into advice provision.

Although consumers may appear to decide for themselves which investments to invest in, many are influenced by the manner in which investments are positioned and made available. With this in mind distinguishing between advice and guidance is not simple nor scientific and the FCA has stated that it believes that a customer’s perception is a key factor in determining whether advice is offered or not.

According to the FCA, “if it looks and feels like advice, it probably is advice.” This in itself is not precise and therefore can be interpreted as follows

• If clients are only given general information about one or more investments, or have associated matters explained (e.g. markets) this should suffice that ‘guidance’ rather than ‘advice ‘has been offered. The main difference between guidance and advice is that the client decides which investment/product to buy without having one or more recommended or the investment is steered towards the client through discussion or product literature being sent.