The FCA has today published its consultation paper (CP17/28) on implementing two of the recommendations made in the final report of the Financial Advice Market Review (FAMR), which was published in March 2016.
FAMR was launched in 2015 by the FCA and HM Treasury (HMT) as a result of concerns that the market for financial advice in the UK was not working for all consumers. The review was aimed at exploring the ways in which the Government, industry and regulators could generate a development of a market that would resolve this problem, namely by delivering affordable and accessible financial advice and guidance to everyone, at all stages of their lives.
The CP outlines the proposed changes the FCA would like to make to its Handbook. These are:
- changes arising from amendments to the Regulated Activities Order: FAMR recommended that HMT should consult on amending the definition of regulated advice on retail investments so that it is limited to firms that provide a personal recommendation. HMT confirmed in February 2017 that the scope of financial advice for regulated firms would change, with effect from 3 January 2018;
- amendments to the Perimeter Guidance Manual (PERG) to give firms more clarity on what amounts to a personal recommendation; and
- introducing new guidance into the Handbook for firms on the treatment of “insistent clients”. Insistent clients (which is not defined in the Handbook) is a term used by the FCA to describe an individual who has received a personal recommendation and chooses to do something other than follow the adviser’s personal recommendation.
Responses to the consultation are welcomed by the FCA’s Advice and Distribution team until 2 October 2017.