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Financial guidance body should drop ‘advice’ label

Portcullis House

The term advice should be dropped from all branding, marketing and communications associated with the formation of the Government’s new single public financial guidance body.

The Personal Finance Society (PFS) made its view clear as part of its submission to the Government’s public financial guidance consultation which was lodged on Monday. It argues that the persistent use of the ‘advice’ label, when referring to guidance activities, continues to confuse consumers and the general public.

The society makes the point that the creation of a new single guidance body offers the perfect opportunity to clearly differentiate the services offered by the new body from those offered by a regulated professional adviser. This should be achieved by aligning terminology and using the term ‘advice’ only when specifically referring to regulated financial advice provided by a professional financial adviser.

Personal Finance Society Chief Executive Keith Richards said: “We have consistently called for terminology that is consistent with the service being offered and more intuitive for consumers to understand. Guidance which may signpost consumers to regulated financial advice when required should not be called advice.

“Any promotion of services offered by the new guidance body must be clear, accurate and not misleading, and we have to make it clear that guidance is not advice in the regulated and qualified sense. It is important not to mislead consumers into believing that they will be receiving regulated financial advice, which carries full consumer protection with it.”

PFS is also urging the new guidance body to:

  • instil trust and confidence in the financial advice market by positioning guidance as a signpost, not a substitute, to the retail financial services market;
  • bridge the gap between public guidance and regulated advice by implementing a statutory objective to work more closely with the financial advice sector, including facilitating follow-up actions with the sector.