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Treasury quizzes firms about cost of providing guidance

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Treasury quizzes firms about cost of providing guidance

The Treasury has written to firms asking for views on the advice-guidance definition.

The government's latest look at the definition comes soon after the Financial Conduct Authority (FCA) issued fresh guidance on what constitutes advice.

A Treasury spokesman confirmed to New Model Adviser® it is currently engaging with the industry It said it has asked for an update on the costs and benefits for firms of the new definition, in light of the new guidance.

The financial advice market review, launched in August 2015, proposed a number of changes to make advice more accessible to more people in the UK.

This included proposals to clarify the difference between advice and guidance. In February 2017 the Treasury announced it was changing the Regulated Activities Order (RAO) so advice would constitute a personal recommendation.

The FCA then published further guidance on this perimeter definition in August 2017.

However, there has still been confusion among some in the sector about where the line stands between advice and guidance and a feeling it is not closing the advice gap.

Research of advisers by Aegon earlier this year found 69% did not think the new definition is helping to close the advice gap.

Last July the FCA’s then head of pensions policy Maggie Craig said the advice-guidance definition will not ‘stay static’.

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