On 7 April 2020, the FCA published a web page concerning the stock market volatility that has been caused by the COVID-19 pandemic. On the web page the FCA explains how firms can avoid straying into making personal recommendations when bringing out the implications for customers of realising their investments or cancelling life assurance.
The FCA is aware that some firms that do not provide advice are concerned that, by trying to provide customers with information to make better informed decisions, they may unwittingly stray into giving personal recommendations (i.e. providing regulated investment advice). Specific requirements apply under the FCA’s rules to firms giving personal recommendations (see in particular Principle 9, COBS 9 and COBS 9A) – these ensure the advice is suitable in light of the specific customer’s circumstances and objectives.
On the FCA’s web page the regulator sets out its views on actions that firms can take to assist customers which, in its view, don’t amount to the provision of a personal recommendation.
The FCA also states that it has spoken to the Financial Ombudsman Service, which confirmed that, in deciding what is fair and reasonable in all the circumstances of a complaint, the information on the web page would be one of the things that it will take into account if a customer brings a complaint about the firm’s communications on surrendering investments at this time.