The FCA has published Policy Statement 17/25: Policy Statement on Financial Advice Market Review Implementation Part II and Consultation on Retiring FG12/15 and FG14/1 (PS17/25).
PS17/25 outlines the FCA’s response to its earlier consultation, Consultation Paper 17/28: FAMR Implementation Part II and insistent clients (CP17/28), and announces a consultation on the retirement of Finalised Guidance 12/15 and 14/1.
In CP17/28 the FCA set out proposals that sought to implement certain recommendations following the Financial Advice Market Review (FAMR), including:
- changes to the FCA Handbook arising from amendments to the definition of advice on investments in the Regulated Activities Order (RAO);
- guidance on personal recommendations; and
- guidance arising from experiences of the FCA’s Advice Unit.
The FCA also proposed new guidance on insistent clients designed to address concerns raised by firms.
The FCA reports that respondents were generally supportive of the proposals in CP17/28 and it is proceeding largely on the basis on which it consulted, with the exception of the PERG material on personal recommendations, which it intends to consider further (see below).
The amendments to the RAO take effect from 3 January 2018. Affected firms need to consider how the changes in chapter 2 of PS17/25 affect them.
Guidance arising from experiences of the FCA’s Advice Unit will be added to Finalised Guidance 17/8: Streamlined advice and consolidated guidance. Finalised Guidance 12/10: Simplified Advice will be retired.
Early in the new year the FCA will publish a Policy Statement summarising feedback on the draft PERG guidance on personal recommendations and any amendments to the material it consulted on in CP17/28. At this point the FCA will also retire Finalised Guidance 15/1: Retail Investment Advice. In the meantime, authorised firms that wish to make use of the RAO amendment can find an explanation of the amendment to the Article 53(1) activity in a technical note that was published in February 2017 (here).
The FCA is also using PS17/25 to consult on retiring two pieces of non-Handbook Guidance on inducements and conflicts of interest (Finalised Guidance 14/1) and on independent and restricted advice (Finalised Guidance 12/15). The FCA expects for most firms, this guidance will be superseded by new requirements coming into force on 3 January 2018, including those implementing MiFID II. The FCA is asking for comments by 19 January 2018.
View PS17/25: FAMR implementation part II and consultation on retiring FG12/15 and FG14/1, 8 December 2017