Category: Distribution · Reviewed by Mark Fox, Broker · Renewals · Last reviewed 2026-06-05
Restricted advice is regulated financial advice given on the basis of a market analysis limited by product, provider, or other characteristic, in contrast to independent advice, which must rest on comprehensive and unbiased market analysis. A firm offering restricted advice must disclose the restriction to the customer in advance.
Category: Distribution and intermediation Also known as: Restricted financial advice, Tied advice Regulatory basis: FCA Handbook COBS 6.2A.6R; introduced by the Retail Distribution Review 2012 Related concepts: IFA, Independent intermediary, Tied agent
Under COBS 6.2A, advice given by a firm to a retail client on a retail investment product is either “independent” or “restricted”. Restricted advice is a residual category that captures any advisory service that does not meet the COBS 6.2A.5R independence test. Common restrictions include: panel of providers only; product type only (e.g., pensions only); single provider (tied); or specific characteristics (e.g., ethical investments only).
The independence / restricted distinction was introduced by the Retail Distribution Review (FSA Policy Statement PS10/6 and related publications) with effect from 31 December 2012. COBS 6.2A.6R(1) requires a firm holding itself out as offering restricted advice to disclose the nature of the restriction in good time before providing advice. SUP 16 requires regulatory reporting of the firm’s status. The Insurance Distribution Directive Articles 19-22 contain parallel disclosure requirements for insurance distribution.
A restricted advice firm is required, before providing advice, to give the customer information on the basis of which it will provide the advice — specifically, whether the firm will consider products from a limited number of providers, will give advice on a limited type of product, or both. The disclosure must be in a durable medium and must be clear, fair and not misleading. Restricted advisers may still hold the same Level 4 RDR qualification as independent advisers, may be subject to SM&CR Certification, and may receive adviser charges or commission (for protection-only business).
A “restricted (panel)” advice firm advises from a selected panel of providers; a “restricted (product type)” firm advises only on pensions, or only on protection, or only on annuities; a “restricted (single)” firm is tied to one provider; and a “restricted (criteria)” firm advises only on products with specified characteristics. The FCA permits descriptive labelling provided it is fair, clear and not misleading.
A bank financial adviser providing pension and ISA advice only on the bank’s own-brand products operates on a restricted (single) basis. Pre-advice disclosure must make clear that the adviser will not consider products from other providers and that the customer should consider seeking independent advice if a broader analysis is required.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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