Guidance Must Not Be Called Advice

Published / Last Updated on 22/02/2017

Guidance Must Not Be Called Advice.

Finally, the largest professional education and membership body for Financial Advisers, the Personal Finance Society (part of the Chartered Insurance Institute) has come out and said what most financial advisers have been saying for a few years:

The Government must remove the term 'advice' from all its branding, marketing and communications associated with the formation of its new single public financial guidance body.

Currently, despite having to be paid for by the finance industry, the government has two ‘free’ guidance bodies for consumers:

  • The Pensions Advisory Service (TPAS)
  • The Money Advice Service (MAS)

NEITHER OFFERS ADVICE!  Yet it is in the title.

These are all to be combined into a single public financial guidance body and the PFS wants reference to the term “advice” to be removed.

Guidance is not advice.  Outside of government bodies, if you are not a Financial Adviser you cannot offer financial advice or purport to be offering financial advice.

Guidance carries no liability.  It cannot be personal and cannot mention specific products or recommendations.  The “guide” does not need to have any financial services qualifications.

Advice carries a liability.  A financial adviser makes a personal recommendation to you with specific products or recommendations.  The adviser must be qualified, in many cases to degree level.

We all agree that the misuse of the term advice may be misleading to you, the consumer whether it is from government or private companies.  Even the EU and the UK regulator have two totally different definitions of what constitutes financial advice.

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