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Personal Finance Society
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Paper No. 2 - Independent & Restricted Advice

From 31st December 2012, a new set of rules will apply to how firms giving investment advice to retail clients can describe their services. This paper is aimed at providing
a better understanding of the terms 'Independent' and 'Restricted' so that firms and individual advisers can make an informed choice about their business going forward.

As a professional body with members drawn from across the adviser community, the aim of the PFS is to provide members with an impartial interpretation and a better
understanding of the new rules. The Society seeks to ensure that any decisions that members make are for the right professional and commercial reasons, and not because
of misunderstanding or lack of clarity.

Now that the final rules have been made it is appropriate to consider how to apply those rules in practice and we have included examples which we hope will aid understanding
of this significant element of the Retail Distribution Review (RDR).

In order to create as much of a common understanding as possible, we have consulted a range of interested parties, including professional and trade bodies, and the Financial
Services Authority.

In brief, the changes are:
• if you declare yourself to be an independent adviser you will need to consider a broader range of products (beyond packaged products);
• an independent adviser will need to provide unbiased, unrestricted advice based on a comprehensive and fair analysis of the relevant market; and
• all advisers will have to inform their clients before providing advice, whether they provide 'independent or 'restricted' advice'.

Downlaod the full paper here »