What is investment advice?


An investment advice is deemed to be the act of providing personal recommendations to a client or potential client on one or more transactions relating to financial instruments.

When providing investment advice, firms are required to recommend to the client (or potential client) the financial instruments that are suitable for him/her and, in particular, are in accordance with the client`s risk tolerance and ability to bear losses.

The term ‘advice’ means a ‘recommendation of what you should do’. For example, a recommendation to buy or sell a particular investment. The recommendation is personal to the client and based on his/her specific circumstances and financial objectives.

Investment advice is different from guidance that includes information about different types of investments or general principles without recommending a specific course of action or giving a personal recommendation.