Contained in the section of the guidance notes that sets out some of the FSA’s expectations on meeting the standard for independent advice, the regulator states: “A firm that provides independent advice should base their recommendations on a comprehensive and fair analysis of the relevant product markets, which will include products, such as collective investment schemes, that are manufactured outside the UK but are widely available to UK consumers.”
But the FSA also states that it “may be possible for a firm to conclude for many clients, early on in the advice process, that certain product types are not going to be suitable, and therefore not consider these product types further for those clients.”
The onerous requirements mean that, even if the IFA firm’s professional indemnity insurance policy specifically excludes certain products, this “would not be a valid reason for never advising on such products."
As far as unregulated collective investment schemes (UCIS) are concerned, the FSA also made clear that it proposes to consult on new rules during 2012 in a separate statement. The current position here is an already-in-place limitation of the categories of investors to whom UCIS can be marketed.
