Related provisions for COBS 6.2A.1B
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(1) A firm must not hold itself out to a retail client as acting independently unless the only personal recommendations in relation to retail investment products it offers to that retail client are:(a) based on a comprehensive and fair analysis of the relevant market; and(b) unbiased and unrestricted.(2) Paragraph (1) does not apply to group personal pension schemes if a firm discloses information to a client in accordance with the rule on group personal pension schemes (COBS
(1) A firm that provides both independent advice and restricted advice should not hold itself out as acting independently for its business as a whole. 6(1A) 6A firm that offers an unlimited range of regulated mortgage contracts, or gives advice in relation to contracts of insurance on the basis of a fair analysis, but offers restricted advice on retail investment products should not hold itself out as acting independently for its business as a whole, for example by holding itself
5In complying with COBS 6.2A.3 R, a firm which: (1) holds itself out to a retail client as acting independently; and(2) relies upon a single platform service to facilitate the majority of its personal recommendations in relation to retail investment products;must take reasonable steps to ensure that, as appropriate, the platform service provider bases its selection of retail investment products on a comprehensive, fair and unbiased analysis of the relevant market.
5When a firm considers whether a platform service provider's selection of retail investment products is based on an unbiased analysis of the relevant market, a firm should take into account any fees, commission or non-monetary benefits the platform service provider receives in relation to those retail investment products.
(1) A firm must include the term “independent advice” or “restricted advice” or both, as relevant, in the disclosure.(2) If a firm provides independent advice in respect of a relevant market that does not include all retail investment products, a firm must include in the disclosure an explanation of that market, including the types of retail investment products which constitute that market.(3) If a firm provides restricted advice, its disclosure must explain the nature of the
A firm may meet the disclosure requirements in the rule on describing the breadth of a firm's advice service (COBS 6.2A.5 R) and the rule on content and wording of disclosure (COBS 6.2A.6R) by using a services and costs disclosure document or a combined initial disclosure document (COBS 6.3 and COBS 6 Annex 1G or COBS 6 Annex 2).
A personal recommendation on a retail investment product that invests in a number of underlying investments would not of itself meet the requirements for providing unbiased and unrestricted advice even if the retail investment product invests in a wide range of underlying investments.
In order to satisfy the rule on firms holding themselves out as independent (COBS 6.2A.3 R) a firm should ensure that it is not bound by any form of agreement with a retail investment product provider that restricts the personal recommendation the firm can provide or imposes any obligation that may limit the firm's ability to provide a personal recommendation which is unbiased and unrestricted.
A firm may be owned by, or own in whole or part, or be financed by or provide finance to, a retail investment product provider without contravening the ‘unbiased, unrestricted’ requirement provided the firm ensures that that ownership or finance does not prevent the firm from providing a personal recommendation which is unbiased and unrestricted.
In providing unrestricted advice a firm should consider relevant financial products other than retail investment products which are capable of meeting the investment needs and objectives of a retail client, examples of which could include national savings and investments products and cash deposit ISAs.
A firm may provide a personal recommendation on a comprehensive and fair analysis basis required by the rule on firms holding themselves out as independent (COBS 6.2A.3 R) by using ‘panels’. A firm would need to ensure that any panel is sufficiently broad in its composition to enable the firm to make personal recommendations based on a comprehensive and fair analysis, is reviewed regularly, and that the use of the panel does not materially disadvantage any retail client.
If a firm chooses to use a third party to conduct a fair and comprehensive analysis of its relevant market, the firm is responsible for ensuring the criteria used by the third party are sufficient to meet the requirement. For example, criteria which selected retail investment product providers on the basis of payment of a fee (or facilitation of adviser charges), whilst excluding those not paying a fee (or such a facilitation) would not meet the comprehensive and fair analysis
(1) Firms are reminded of the systems and controls requirements in SYSC.(2) A firm providing restricted advice should take reasonable care to establish and maintain appropriate systems and controls to ensure that if there is no retail investment product in the firm's range of products which meets the investment needs and objectives of the retail client, no personal recommendation should be made.(3) A firm specialising in a relevant market should take reasonable care to establish