The Financial Services Authority has issued final guidance for Financial Planners today on independent and restricted advice.

The guidance follows a consultation on the subject in February and is clarified in paper FG12/15 Independent and restricted advice.

The FSA said Financial Planners wanting to offer independent advice should ‘not be restricted by product provider and should also be able to objectively consider all types of retail investment products which are capable of meeting the needs and objectives of a retail client’.

Life policies, stakeholder pension schemes, personal pension schemes, funds, investment trust and investment trusts savings schemes were all included under the definition of retail investment products.

The definition is deliberately broad to ensure that all comparable current and future products are subject to the same selling standards.

A restricted advice firm must tell the client it is restricted, explain the nature of the restriction and not use ‘independent’ to describe the advice it is offering.

Firms were given flexibility in how they described themselves so long as the description was fair, clear and not misleading. It should not imply that it has restricted its product range to those that are most suitable for clients.

Regarding platforms, the FSA said platforms could be used but Financial Planners needed to remain aware of the platform’s limitations and advise ‘off-platform’ if this was best for the client.

The FSA said it would be ‘very rare, if possible at all’ for a firm to use a single platform for all their clients.