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Redefinition of financial advice will enhance investor protection, says WMA

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The Wealth Management Association (WMA) has welcomed a move by the Treasury to ensure that only regulated firms are able to provide financial advice to clients.

WMA, the trade association representing over 180 firms who look after over GBP825 billion of the UK's wealth for individual investors, has also welcomed the Treasury's commitment to bring the UK definition of advice in line with the Markets in Financial Instruments Directive (MiFID II) definition of advice as a personal recommendation.
 
WMA was a key participant in the consultations, launched in September last year, highlighting industry views that current definitions lacked clarity about what constitutes advice and what constitutes guidance.
 
WMA further argued that standardising the definitions of advice to those outlined in MIFID II would allow firms to mitigate risks and better help consumers.
 
The recent announcement, which the government says will help protect consumers from being sold inappropriate products, confirms that personal recommendations can only be made by regulated firms. WMA says the government will leave the wider RAO definition of advice as “advising on investments” in place for unregulated firms.
 
"This is an important decision for the industry and its clients: consumer protection, proportional regulation and clarity are essential tenets and this move enables firms to deliver to individuals and families the best possible financial advice so they can confidently plan for the future,” says WMA chief executive Liz Field.

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