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Paper No. 4 - Independent & Restricted Advice


This paper is one of a series of papers that the PFS is producing under the Professional Direction title. This edition replaces paper 2 first issued in September 2011. It represents the PFS interpretation of the rules as far as we have been able to ascertain them and follows FSA final guidance on Independent and Restricted advice, published in June 2012. The paper has no formal or regulatory status and is intended solely to assist members in understanding the new rules.

From 31st December 2012 a new set of rules will apply to how those giving investment advice to retail clients can describe their services.

In September 2011 we published a Professional Direction paper aimed at providing a better understanding of the terms Independent and Restricted so that firms can make an informed choice about their business going forward.

Since September there has been continued debate and interest around this subject which has resulted in further guidance from the FSA in June 2012. This revised Professional Direction paper has been produced to further clarify some of the outstanding issues and replaces the earlier version.

As a professional body with members drawn from across the adviser community, the PFS has no set agenda other than to provide members with improved understanding of the new rules. We seek to ensure that any decisions are made for the right professional and commercial reasons, and not because of misunderstanding or lack of clarity in application
of the new rules.

Now that the final rules are in place 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.

Download the full paper here »