UK Financial Services, regulations and ethics

In this chapter, we answer certain key questions in terms of following an industry standard process of advice and recommendations. Primarily we will deal with a process that should be followed if the client is categorised as a retail client. Under the FCA’s Conduct of Business rules these clients are afforded the most protection. This section uses brief key summary points only.

Guidance involves providing a customer with information about products to allow them to make an informed choice or whether or not it is suitable for them and their needs. Advice can only be given after a detailed analysis of a client’s circumstances has been undertaken by a qualified and authorised financial adviser, who will then provide recommendations specific to their circumstances.

Targeted support

There are long held concerns that many people are unable to access financial advice, on the basis of cost or for other reasons

The FCA conducted an Advice Guidance Boundary Review to clarify the difference between advice and guidance, with the aim of improving access

The aim was to give firms the confidence to support customers, with feeling that they would risk inadvertently straying into advice

Targeted support regime was launched in April 2026

Allows firms to provide targeted, non-personalised support to groups of customers with similar characteristics

Regime is focused on pensions and investments

Targeted support sits between guidance and full advice

What must ...

Shortened demo course. See details at foot of page.

...anation incorporating the advantages and disadvantages of each of your recommendations followed up by a written explanation in the form of a structured report (suitability report). The latter will detail the client’s  needs and priorities, which of these are and are not currently being met by existing arrangements, formal recommendations and how they meet the client’s needs incorporating their features, benefits, tax treatment etc and finally, any unresolved needs.

Assuming your client agrees with your recommendations and proceeds with them, outline the considerations you would take into account when carrying out ongoing reviews.

Answer

Ascertain any changes in their personal circumstances

Consider the suitability of any newly available products

Consider the relevance of any changes in taxation rules and other legislation

Use tax allowances and exemptions

Investing in tax advantaged products, e.g. ISAs

Your client may want advice on aspects of their finances (e.g. mortgages, debt, legal implications of divorce) that you are not qualified / sufficiently knowledgeable to assist with. What if anything can you do?

Answer

There is a difference between providing guidance and providing advice. Guidance involves providing information to help someone to make an informed decision on their own whereas advice is a detailed process carried out by professional specialists in the particular area, advice will result in a recommendation.

Many organisations provide generic advice as a normal part of their business &...

Shortened demo course. See details at foot of page.

...provides guidance to consumers through its consumer facing brand, MoneyHelper.