AUTH App 1.26 The investment must be a particular investment

For the purposes of article 53 advice must relate to a particular investment - generic or general advice is not covered. Generic or general advice may, however, be a financial promotion (see AUTH App 1.4).

Generic advice will not be caught by article 53. Examples of generic advice may include:

1. (1)

   financial planning;

2. (2)

   advice on the merits of investing in Japan rather than Europe;

3. (3)

   advice on the merits of investing in investment trusts as opposed to unit trusts or unit-linked insurance; and

4. (4)

   advice on the merits of investing offshore, or in fixed income rather than floating rate bonds.

In the FSA's view, guiding a person through a decision tree should not, of itself, involve advice within the meaning of article 53 (it should be generic advice). For example, helping a person to understand what the questions or options are and how to determine which option applies to his particular circumstances. But a recommendation that the person concerned should, if the results of using the decision tree so indicate, buy a stakeholder personal pension from a particular provider (or any other particular investment) would be advice for the purpose of article 53. An unauthorised person guiding another through a decision tree needs to make it clear that the decision tree aids generic decisions and that the person doing the guiding is not recommending any particular investment.

Examples of a particular investment include:

1. (1)

   securities, shares in ABC plc, Treasury 10% 2001 stock, XYZ plc warrants;

2. (2)

   units in collective investment schemes - ABC smaller companies fund, XYZ Growth Trust;

3. (3)

   exchange-traded derivatives - LME Copper Grade A 3 months, LIFFE Japanese Government bond, ABC plc traded options;

4. (4)

   contractual investments, for example, futures and other contracts having specified terms and conditions such as duration, volume, interest rate or price and which are to be entered into with a particular person;

5. (5)

   contracts of insurance which are both products and contractual investments; so a particular investment would include:1

   1. (a)

      the ABC Life Personal Pension or the XYZ Life Guaranteed Bond; or

   2. (b)

      a contract having essential terms and provider specified - for instance, a 25-year with-profits low cost endowment contract covering husband and wife and to be issued by XYZ Life Plc.