PERG 8.26 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 PERG 8.4).
Generic advice will not be caught by article 53. Examples of generic advice may include:
- (1)
financial planning;
- (2)
advice on the merits of investing in Japan rather than Europe;
- (3)
advice on the merits of investing in investment trusts as opposed to unit trusts or unit-linked insurance; and
- (4)
advice on the merits of investing offshore, or in fixed income rather than floating rate bonds.
In the FCA'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)
securities – shares in ABC plc, Treasury 10% 2001 stock, XYZ plc warrants;
- (2)
units in collective investment schemes - ABC smaller companies fund, XYZ Growth Trust;
- (3)
exchange-traded derivatives - LME Copper Grade A 3 months, LIFFE Japanese Government bond, ABC plc traded options;
- (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)
contracts of insurance, which are both products and contractual investments; so a particular investment would include: