The service provides advisers with a list of all the securities that the AIC’s members have confirmed can be recommended to ordinary retail investors under the new rules.
Under RDR, independent advisers are required to consider all pooled investments which might be suitable for their clients. However, under new rules which came into force on 1 January 2014, financial advisers cannot recommend any of these which are identified as “non-mainstream pooled investments” as defined by the FCA.
“Many of the funds will be eligible, such as Ucits, ETFs, VCTs and investment trusts. But there are certain high-risk esoteric investments which will not be suitable for retails investors,” Ian Sayers, director of the AIC, said.
The rules stipulated by the FCA are complicated and technical, which makes it challenging for advisers to ensure they understand which open-ended funds, ETFs or investment companies they can recommend. The AIC list aims to simplify the process for advisers.
Sayers added that generally speaking, 99% of recommendations by advisers will be suitable, but that the FCA may ask advisers how they reached a certain recommendations. That is when advisers will need evidence of the rules to make themselves technically compliant, he said.
