The shifting financial advice boundary

HM Treasury’s response to its consultation on amending the definition of financial advice was published on 27 February 2017. The UK Government has confirmed its decision to change the definition to bring it in line with MiFID. But what are the anticipated outcomes of this reform and how will it affect firms operating in the UK financial services sector? Peter Wilson and Caroline Bystrom survey the changes and consider the outlook.

Peter Wilson is a senior associate in the London-based financial services regulatory group at law firm Taylor Wessing; Caroline Bystrom is a professional support lawyer and Thomas Connock a trainee solicitor. Contact them on: p.wilson@taylorwessing.com; c.bystrom@taylorwessing.com and t.connock@taylorwessing.com.

A summary of the changes

Responding to its consultation on amending the definition of financial advice [1] HM Treasury (HMT) confirmed that amendments to article 53 of the Regulated Activities Order[2] (RAO) will introduce a new financial advice definition. HMT laid legislation [3] on 30 March 2017, amending the RAO, together with an explanatory memorandum [4] and impact assessment [5]. The changes are expected to come into force on 3 January 2018, to coincide with the MiFID II implementation date.