Firms offering both an independent and restricted advice service will need to ensure there is “clear blue water” between the two models, according to regulatory compliance firm Resources Compliance.
Speaking at the Personal Finance Society annual conference in Birmingham last week, Resources Compliance consultant David Morgan said: “Firms can offer both independent and restricted advice, although this is potentially difficult to manage. There could be some issues over disclosure and there has to be clear blue water between the two models.”
Morgan highlighted that firms choosing to offer independent and restricted services would not be able to call themselves independent because the restricted part of the advice model would override the independent services available.
The FSA said last month it expects 71 per cent of firms to remain independent, with 4 per cent offering a restricted service. A further 4 per cent are expected to offer both while 21 per cent are not yet decided.
Plan Money director Peter Chadborn says: “There is a danger here that the lines can be blurred between independent and restricted advice but the real question is whether the client is really going to understand the difference.”