In regulating the UK insurance where the sales process involves giving advice, the essential elements in a ‘private customer advised sale’ must be (a) on the advantages and disadvantages of the customer buying or selling, and (b) a particular insurance contract(s). Generic advice, e.g. recommending that someone should buy a household policy, would not fall within the definition of advice. See ADVISING AND SELLING STANDARDS.
Insurance Encyclopedia
Advice risk
The risk of liability attaching to the insured as a result of giving advice. Solicitors, etc., are liable when ‘negligent’ advice leads to financial loss. The risk is insurable under professional indemnity insurance. Advice for which a fee is normally payable is excluded under public and products liability insurances. Advice that is incidental to supplying a product or carrying out work is not excluded but any resultant loss will only normally be within public/product liability cover if the third party suffers accidental bodily injury or damage to property.
Advised sales
See: Advising And Selling Standards.
Adviser
A financial adviser; representative; appointed representative.
Advising and selling standards
FSA requirements laid down in ICOB which categorises sales into advised sales and non-advised sales. The former occurs where the customer is given an opinion or recommendation to buy or sell a specific non-investment insurance contract. The customer must be given a statement setting out the reasons for the recommendation as well as a demands and needs statement. Non-advised sales occur when the sales process only involves providing information and no advice. The customer must be given a demands and needs statement unless the policy is sold directly to a commercial customer. See ADVISING ON INVESTMENTS; ARRANGING INSURANCE.
Advising Bank
A bank that receives a letter of credit from an issuing bank, verifies its authenticity, and forwards the original letter of credit to the exporter without obligation to pay.
Advising on investments
A regulated activity which occurs when the person advised is: (a) an investor or potential investor, or is acting as agent for such a person; (b) in receipt of advice on the merits of doing any of the following (whether as principal or agent): buying, selling, subscribing for or underwriting a particular security or relevant investment, ((i) designated investment, funeral plan contract, pure protection contract, general insurance contract, or right to, or interest in, a funeral plan contract; or (ii) exercising any right conferred by such an investment, other than a pure protection contract, to buy, sell, subscribe for or underwrite such an investment.)
Advisor
In a 401(k) defined-contribution pension plan, a firm that helps the employer choose a provider, select the investment options, and make any other decisions about the plan.
Advisory Capacity
A term indicating that a shipper’s agent or representative is not empowered to make definite decisions or adjustment without the approval of the group or individual represented.
Advisory Council on Social Security
Prior to the enactment of the Social Security Independence and Program Improvements Act of 1994 (Public Law 103-296) on August 15, 1994, the Social Security Act required the appointment of an Advisory Council every 4 years to study and review the financial status of the Old Age, Survivors, and Disability Insurance (OASDI) and Medicare programs. Its report on the financial status of the OASDI program was submitted on January 6, 1997. Under the provisions of the Public Law, this was the last Advisory Council to be appointed.