The FCA has set out finalised guidance on what constitutes a personal recommendation, with the aim to help firms to avoid overstepping the boundary.
The paper - Retail investment advice: Clarifying the boundaries and exploring the barriers to market development – was published this afternoon.
It has set out definitions and described what scope there is for firms to provide a range of services in relation to those products.
The regulator said it had found a "small number of examples of firms being reticent to bring products to market" due to uncertainty around the issue.
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Its research also showed "an overly cautious approach to providing information that might help customers avoid poor outcomes".
The report said there were some businesses, which were "struggling to navigate the options in-between such as simplified advice or limited advice services and sales without personal recommendations that involve guiding the customer in some way."

The FCA definition table can be seen here:




The report, which can be read in full here, stated: "We believe that a well-functioning retail investment market needs different delivery mechanisms to be fully effective for a broad range of potential investors.
"There are benefits to well-designed, low-cost methods of meeting customers' straightforward needs – the challenge is to ensure that such methods deliver good outcomes for customers in a way that is viable for firms.
"We know that firms want greater clarity about how they can help customers to make informed decisions without stepping over the boundary into providing a personal recommendation."
The FCA said: "Our guidance helps to clarify the different types of retail investment sales models, the boundaries between them and the associated regulatory requirements. The guidance clarifies the regulatory framework in respect of different types of investments sales model.
"And it provides detailed examples and our view on whether they amount to a personal recommendation or not."   

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