Before providing advice, an investment firm must inform a client whether this advice is being provided on an independent or a non-independent basis.
Firms that provide investment advice on an independent basis are not permitted to retain any monetary or non-monetary benefit (inducements) paid by a third party – or if they accept such a benefit, they must transfer it to their client – and are required to include a sufficiently wide and diverse range of financial instruments offered by various providers in the independent advice. Independent advice may not be limited to financial instruments that are issued or provided by the investment firm itself or related entities. If the advice does not satisfy these requirements, then the advice is not independent.
