Glossary · UK
What is Restricted Advice?
Financial advice limited to a specific range of products, providers or areas of the market, which must be clearly disclosed to the client as restricted rather than independent.
Full Definition
Restricted advice is personal financial advice given by an adviser or firm whose recommendations are limited in some way -- for example to products from a single provider (such as a bank's in-house advisers), a panel of selected providers, a particular type of product (such as pensions only, or protection only), or a specific investment approach -- rather than being drawn from the whole of the relevant market as an Independent Financial Adviser must offer. The FCA requires any adviser who is not fully independent to describe their service as restricted and to explain clearly, before giving advice, the nature and extent of the restriction, so the client understands they are not seeing every option that might otherwise be available to them. Restricted advice is not necessarily worse or less suitable than independent advice -- a specialist adviser restricted to, say, defined benefit pension transfers or equity release can bring deep expertise in that narrow area, and large, well-run restricted firms exist across the market -- but the client is trading breadth of choice for that specialism or for the adviser's chosen product range. As with independent advice, restricted advisers are paid an agreed, transparent fee by the client under the FCA's adviser-charging rules rather than being paid product commission.