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FCA clarifies advice definition as it launches consultation
by Danielle Levy on Jul 11, 2014 at 13:16
The announcement comes as the watchdog said it was aware that firms offering retail investments without personal recommendations would like greater clarity on how they can support customers in making informed decisions, increasingly via technology, without stepping over the boundary into providing a personal recommendation.
Following the introduction of the RDR, the financial watchdog noted the introduction of concerns about the availability and accessibility of personal recommendations to some clients. As a result it said it will monitor this through the year, having recently conducted a large scale piece of quantitative customer research, looking at customers’ interactions with the retail investment market before and after the introduction of the RDR.
The research, found that there had been a small shift from sales channels that involved the giving of a personal recommendation to those that did not (2% of the overall research sample had moved). However, there has been a slightly greater move from channels not involving a personal recommendation to those that did, equating to 4% of the overall research sample).
‘This suggests that the picture is far from straightforward,’ the FCA noted.
As a number of newcomers have sought to plug a post-RDR advice gap, the FCA said it wants to ensure that low cost models designed to meet this need deliver good outcomes for clients in a way that is also commercially viable for those who supply the products and services.
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