The boundary of where financial advice starts and information begins is “almost impossible” to define, the FCA has said.
Speaking at the FCA’s annual public meeting this morning, chair Charles Randall noted the difficulties of defining the advice perimeter in the context of the recent collapse of mini-bond provider London Capital & Finance.
The Financial Services Compensation Scheme has rules that a marketing company used by LC&F did in fact give “advice” and not just generic information to consumers, meaning they could be able to claim redress from the lifeboat fund – paid for by regulated financial planners.
In a press conference following the event, FCA chief executive Andrew Bailey and FCA executive director of strategy and competition Chris Woolard discussed the issue further with Money Marketing.
The FCA harmonised the definition of advice with Mifid II on the back of its Financial Advice Market Review so that to qualify, discussions must include a “personalised recommendation”.
Money Marketing asked if this had gone far enough to clarify what regulated advice entailed.
Woolard added: “We said at the time of the RDR and FAMR review we would take steps to review how firms were implementing them; are they actually implementing them for consumers in terms of access to advice.
“That is a process we expect to continue to do over the course of the year looking at areas where the system can be improved and where it’s working well.”