HM Treasury has launched a consultation to discuss amending the UK definition of financial advice.
The purpose of amending this definition is to create a clear, single outline that organisations can easily follow and build into compliance arrangements, and to remove uncertainty around the boundary between what constitutes regulated advice and what constitutes guidance.
The consultation seeks to change the wording in Article 53 of the Regulated Activities Order (RAO) so that it aligns with how financial advice is described in the Markets in Financial Instruments Directive (Mifid).
The definition of regulated financial advice as set out in the RAO is ‘advising on investments’. This definition is broader than Mifid, which requires advice to be of a personal nature.
The consultation follows the reforms suggested in the Financial Advice Market Review (FAMR), which was published in March 2016. In the March 2016 Budget, the government committed to implementing the reforms in the areas for which it has responsibility.
Currently, organisations can provide employees with financial guidance, but are unable to offer staff financial, regulated advice directly.
The consultation closes on 15 November 2016.