The recent European Investment Services Directive has suggested that financial firms will no longer be able to transact "no advice" execution sales. This is where no advice is offered by an adviser or firm and the consumer, particularly on the Internet, is allowed to purchase the product or investment that they want. As no time has been used in advising the consumer, firms are able to offer the purchase of products at a discount.
Conservative Finance Spokeswoman and British MEP, Theresa Villiers, is lobbying the European Parliament to try and get the decision reversed to allow people to still utilise execution services.
Our View
This is a difficult decision. If people are able to purchase at a discount with no advice there is a real danger of mis-buying (rather than mis-selling) i.e. people purchasing products that they do not understand. However, in a free market why should the consumer, who knows what he or she wants and does not want to pay for additional advice or increased costs, be penalised?
This ruling will seriously hit discount advisers and stockbrokers. Our approach has always been to provide guidance when needed and discounts when not hence the titles of our site portal.
Our business model which is proving ever more popular of remote advice will not be affected by the ruling.