Recommendation 21

The line between advice and guidance is a continuing issue of debate. There is demand for both enhanced guidance and limited advice, but there is reluctance from the industry to operate too close to the advice/guidance boundary and resistance to such services being offered by the Money and Pensions Service, both because of the likely additional cost and regulatory requirements. We recommend that the Financial Conduct Authority uses the definitions below of enhanced guidance and limited advice: a) Enhanced guidance: guidance on the options available which is tailored to an individual dependent on the information they provide, without a recommendation. This is not a regulated activity. b) Limited advice: a recommendation made to an individual based on limited or partial information about them. The Financial Conduct Authority should provide examples to the industry to encourage the wider offering of enhanced guidance and limited advice to the fullest extent allowed by the existing law.