What you can say to a client

Describing what you can see in a client’s accounts is your work. Recommending what the client should do about it is regulated advice. Four examples show the same point said each way.

474163

Your firm needs no FCA permissions to make the introduction.

Equity & General’s FCA number

The test

Describing what you can see in the accounts, the filings and the client’s position is accountancy. Recommending what the client should do about it is regulated advice, which needs FCA permissions your firm does not hold.

Observing that £400,000 has sat in a company account for three years, earning deposit interest, with no stated purpose, is a statement about the balance sheet. Suggesting the client puts £60,000 of it into a pension is a personal recommendation on a regulated product.

A client asking “what would you do?” is asking for a personal recommendation. Answering it is regulated advice.

What you may say

What you can see in the accounts, the filings and the client’s position
That the Equity & General financial adviser can look at it
General factual information about how something works, such as what the annual allowance is
That your firm works with Equity & General, and would the client like an introduction

What you must not say

Name a product, a provider, a fund or a wrapper as the answer
Recommend a contribution figure, a transfer or a withdrawal
Advise on the merits of one option against another
Tell a client what you would do in their position

Four examples

Do not say “You should put this year’s surplus into a pension.”

Say “There may be pension options for this year’s surplus. That is what the financial adviser we work with would look at. Shall I introduce you?”

Do not say “Those three old pensions should be combined into one.”

Say “You have three old pensions. Whether they belong together or apart is a question for the financial adviser we work with. Shall I introduce you?”

Do not say “You need £500,000 of life cover for that loan.”

Say “That loan has a personal guarantee behind it and nothing covering the guarantee. Would you like the financial adviser we work with to look at it?”

Do not say “Cash is a terrible investment, markets will do better.”

Say “The cash has been on deposit for three years with nothing planned for it. What it should be doing is a question for the financial adviser we work with.”

When the client asks what you think

A client may say, “Just tell me what you think.” Say it is a question for the Equity & General financial adviser, and offer the introduction.

Keeping a record

Note what you said and when, and raise the introduction in the portal. If a question is asked later about what the client was told, the note answers it.

Where the regulatory responsibility sits

The advice, the suitability report and the regulatory responsibility sit with Equity & General, which is directly authorised by the FCA under number 474163.

Financial planning for your clients, alongside the accounts and tax work

Equity & General is authorised and regulated by the Financial Conduct Authority. There is no charge to your firm, and we do everything to set it up for you.