According to IFA online, the finalized guidance by FSA on independent and restricted advice states how referrals will affect status post-RDR, which is based on the feedback the regulator has received from the IFAs.
The guidance has stated that if a firm fails in providing recommendations on retail investment products and instead refers the client to another firm, its independent status will not be affected.
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"We would, however, expect firms to undertake sufficient due diligence on a service before recommending it to their clients to meet their obligation to treat customers fairly," IFAonline quoted FSA as stating.
Additionally, FSA has clarified that it will be permissible to deploy a team approach, where the client has contact with multiple advisers, and still maintain independent status.
Nevertheless, the FSA has cautioned on the firms to ensure that any resulting personal recommendation should meet the required standard.
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