Firms offering both restricted and independent services after the RDR should not use the word “independent” in their trading name.
In its guidance consultation on independent and restricted advice, published this week, the regulator says firms with one or more restricted adviser cannot say the entire business is independent.
It says: “A firm that provides both independent and restricted advice should not hold itself out as acting independently for its business as a whole.”
The FSA says firms could set up two trading names to differentiate between independent and restricted services.
The guidance states appointed representatives should not hold themselves out as acting independently for their business unless all their personal recommendations meet the independent standard.
The guidance also warns advisers who offer a restricted service that they cannot give clients the impression that their range of products has been restricted to those that are most suitable for the client.
Carbon Financial managing director Gordon Wilson says: “The problem is that a client’s definition of independent is very different from the regulator’s definition.”