Some discretionaries may find it very difficult to guarantee that clients will not receive investment advice at some point in the future, but it is still possible, one expert has observed.
In the lead up to the retail distribution review (RDR), sector regulator the Financial Services Authority has warned managers to ensure they are not seen to be advising clients, but Danielle Levy, writing for Citywire, said this may not be possible without help.
She noted that many firms feel that the distinction between advice and managing investments is "potentially hard to maintain" when considered in the context of a long-term relationship between a client and their wealth manager and claimed some companies may need to consult a compliancy specialist for clarification.
Paul Chavasse, chief operating officer at Rathbone Investment Management, told the source: "To say they will never give advice about a collective or investment product across their client base is difficult, unless you get someone internally to give regulated advice from a different entity."
Last week, advice organisation Moneywise IFA Limited was ordered to pay £19,600 after an investigation found that the rationale behind the investment advice it gave customers using platforms and discretionary portfolios was not explained clearly to investors.
Posted by Tony Miller