GC14/3 Retail Investment Advice: Clarifying the boundaries and exploring the barriers to market development

We are publishing guidance to help clarify the different types of retail investment sales models, the boundaries between them and the associated regulatory requirements. This proposed guidance relates to the following rule(s) in the FCA Handbook: COBS 9 and COBS 10, COBS 6.1A, COBS 6.2A.4G, COBS 2.1.1R and PERG 8.26 and 13.3.

Why are we publishing guidance on this?

We believe it is important that firms are clear on the scope that they have to offer a range of services, through a range of channels to their customers. Through this guidance consultation we also discuss some of the barriers to the market developing further.

The guidance consultation proposes to:

• clarify the regulatory framework in respect of different types of investment sales models
• provide detailed examples and our view on whether they amount to personal recommendations or not
• explore specific issues in this area which our stakeholders have raised with us
• summarise the results of thematic work carried out on firms using new technology to interact with customers
• report on research on how customers use services that do not provide a personal recommendation

The full guidance: GC14/03 Retail investment advice: Clarifying the boundaries and exploring the barriers to market development[1]

To inform our thinking and the development of this guidance, we carried out:

• a thematic review[2] on services that do not provide personal recommendations and simplified advice investment services. (‘Developments in the distribution of retail investments: Purchasing investments without a personal recommendation or with simplified advice’)
• research[3] on the experiences of customers purchasing investments without a personal recommendation (‘The motivations, needs and drivers of non-advised investors: A qualitative research report’)

Who does this guidance affect?

This guidance should be read by firms distributing retail investment products and consumer groups.

What are the next steps?

We invite your views on our proposed guidance to firms.

Please respond by 10 October 2014 (three month consultation). Send your responses by email to [email protected] or by post or telephone to:

Gary Brown
Advice and Distribution team
Policy, Risk and Research Division
The Financial Conduct Authority
25 The North Colonnade
London E14 5HS

Telephone: 020 7066 2476

Want to find out more?

For more information, see:

TR14/10: Developments in the distribution of retail investments: Purchasing investments without a personal recommendation or with simplified advice[2]

Project Innovate

The motivations, needs and drivers of non-advised investors: A qualitative research report[3]

The Financial Conduct Authority consults on guidance to clarify the boundary between different investment advice models[4]