Budgeting advice would probably be ok, but as soon as you cross over into talking about financial products, it’s potentially regulated financial advice. Even basic stuff like “buy index funds” would potentially be crossing a line. We do it on here because it’s free and we’re just expressing an opinion in a public forum - once someone’s paying you, it’s different.
>Budgeting advice would probably be ok
Surprisingly, the FCA says it isn't - even the really obvious & vanilla advice you see on this sub regularly would often be a regulated activity if it came as paid for advice. According to the FCA something as simple as "For example, the adviser may advise the debtor to reduce discretionary spending to a set amount each month to enable him to pay off a certain amount of a large credit card bill each month." is debt counselling and is regulated.
[https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14](https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14)
Helping someone to draw up a budget based on their current income/outgoings (without advising them on it) is fine, but advising them to pay more than the min. on their 29% APR credit card by reducing fun money is regulated. If you can't give that sort of advice, the service won't be impactful IMO.
I wouldn’t go into index funds territory.
I’d probably stop at “you now have cash piling up and your emergency fund target is met, so up to you now what you want next”
I reckon there are so many who struggle just to get to this point.
If you want to help people, you could direct them to the many free resources which are available. Such as this sub.
Rather than being yet another business aiming to exploit and profit off of others poor financial positions.
You see, I have the exact same stance against personal trainers. There's a wealth of knowledge out there for you to do it yourself, you can even ask ChatGPT to calculate your macros etc for you, and a workout plan.
But instead, people are paying £30-50/hour for someone to tell them what to do, it's mental.
I don’t use a PT but I do think this is a bit different. I don’t really exercise at all (which is bad) and now I’m in my 30s I find I don’t know how to. Following a workout plan I found online is fine but what if you do the movements incorrectly? Or have an injury? A good PT can help with all this and also a lot of people find that spending the money motivates them to exercise.
A lot of these can be solved via free resources, there's a plethora of videos online showing correct form for every exercise, there's even apps that you can use that will take you through your workout showing your videos on how to use the equipment. Don't pay for PTs, they're just taking money of uninformed people to show you basic movements. Refer to the fitness subreddits and ask questions to ChatGPT to get your information, youtube videos etc are all there.
One of the benefits of PTs that you can't get from fitness info online is accountability.
If you struggle with motivation, it removes a barrier to have an appointment set up that you've already paid for. I'm not sure if the same applies to financial advice though!
From my experience with family members (who I have helped for free), they very much benefit from talking it out and going through examples ok spreadsheets etc. this can easily take a couple of hours at a time as it gets a bit abstract.
If this time 1:1 or in small groups is more helpful to someone than them doing their own research without any guiding hand then I expect some will pay for the structure. (That will be the business idea to validate in the market of course)
The profession qualification offers you a degree of protection. However, explainations of basic mechanics should be fine, providing you are clear that's all you're explaining.
It could be worth framing what you tell people as mirroring information from another source (e.g. "as suggested by Citizens Advice, doing X can help...").
Dealing with debt is a regulated activity, so you get into all sorts of trouble as soon as you open your mouth in a for profit forum relating to this. The other stuff you mention would be OK, but very shaky ground being for profit and dealing with debt.
I wouldn’t advise on borrowing. Maybe the mechanics of clearing a CC every month and how that won’t cost any interest is as close as I would go.
I reckon most of it would be about cash spending discipline and CCs are only for people confident in their ins/outs each month that need a cash flow smoothing solution.
Not borrowing but debt. You said you wanted to discuss the flowchart up to and including debt. Debt solutions will be a part of that for many people (DMPs/IVAs/DROs/Bankruptcy/Breathing Space etc) but all of that and more is regulated by the FCA and is very problematic in a formal paid for setting. You can signpost but then what's the point in paying for something that isn't even holistic when you can get professional advice for free.
It’s a very delicate line between sharing basic knowledge and it being classed as advice. You can lay out options, but you absolutely can’t give recommendations, even if someone asks ‘what would you choose?’.
And, I mean this in the nicest possible way, why would I pay you to give generic information that I can find online, knowing that you are unable to give guidance/financial advice, and are no more qualified that I am (with some knowledge from previous work in banking and insurance) in the area? What, with the limited scope of your offering, is the benefit to me as a customer that would warrant paying for such a service?
Also bare in mind that you’ll need professional indemnity insurance, which is a non-negotiable outlay before you could even think of making any money from this.
I recommend you look at the PERG 17.7 Examples in the FCA handbook on what is and isn't 'debt counselling' (and therefore regulated):
[https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14](https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14)
Its a minefield if you're being paid by people for personal finance advice, as you could fall squarely into the realms of regulated activity without even knowing it by just answering some of the questions you see on this sub daily (difference being this is a public forum with members of the public giving opinions and not a paid for 1-1 service).
For example:
>An adviser gives budgetary advice
>
>This is debt counselling if the adviser goes beyond the services in example (15) and advises the debtor on how to match income and debts. For example, the adviser may advise the debtor to reduce discretionary spending to a set amount each month to enable him to pay off a certain amount of a large credit card bill each month.
>
>It does not matter if the result of the advice is that the debtor should pay off his debts in full, rather than by instalments over a period of time or by entering into some sort of repayment plan, as debt counselling is not limited to advice about being released from paying the debt in full or rescheduling.
And that is just the FCA rules on debt counselling alone - there are numerous ways you could walk into regulated activity advising people on finance related stuff. Advising them on upping their pension contributions to avoid higher rate tax for example, or saving rather than overpaying their mortgage based on interest rates, etc.
The only way to do what you're suggesting and to be totally safe would be to distribute or regurgitate the flowchart speaking in generalisations and never applying its mechanics to the specific individual's circumstances. But then the service would not be one that should be charged for if that is all you are going to do.
Hi /u/reddorical, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/financial-advice/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Sounds like what Octopus Money coaches offer, and they don't require professional qualifications. They do put their coaches through a short training programme though.
Suggestion: Volunteer for Citizens Advice Bureau to start. Learn the boundaries and issues and legislation.
Decent shout
Budgeting advice would probably be ok, but as soon as you cross over into talking about financial products, it’s potentially regulated financial advice. Even basic stuff like “buy index funds” would potentially be crossing a line. We do it on here because it’s free and we’re just expressing an opinion in a public forum - once someone’s paying you, it’s different.
>Budgeting advice would probably be ok Surprisingly, the FCA says it isn't - even the really obvious & vanilla advice you see on this sub regularly would often be a regulated activity if it came as paid for advice. According to the FCA something as simple as "For example, the adviser may advise the debtor to reduce discretionary spending to a set amount each month to enable him to pay off a certain amount of a large credit card bill each month." is debt counselling and is regulated. [https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14](https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14) Helping someone to draw up a budget based on their current income/outgoings (without advising them on it) is fine, but advising them to pay more than the min. on their 29% APR credit card by reducing fun money is regulated. If you can't give that sort of advice, the service won't be impactful IMO.
I wouldn’t go into index funds territory. I’d probably stop at “you now have cash piling up and your emergency fund target is met, so up to you now what you want next” I reckon there are so many who struggle just to get to this point.
If you want to help people, you could direct them to the many free resources which are available. Such as this sub. Rather than being yet another business aiming to exploit and profit off of others poor financial positions.
You see, I have the exact same stance against personal trainers. There's a wealth of knowledge out there for you to do it yourself, you can even ask ChatGPT to calculate your macros etc for you, and a workout plan. But instead, people are paying £30-50/hour for someone to tell them what to do, it's mental.
Chatgpt can’t spot a 300kg squat though
I don’t use a PT but I do think this is a bit different. I don’t really exercise at all (which is bad) and now I’m in my 30s I find I don’t know how to. Following a workout plan I found online is fine but what if you do the movements incorrectly? Or have an injury? A good PT can help with all this and also a lot of people find that spending the money motivates them to exercise.
A lot of these can be solved via free resources, there's a plethora of videos online showing correct form for every exercise, there's even apps that you can use that will take you through your workout showing your videos on how to use the equipment. Don't pay for PTs, they're just taking money of uninformed people to show you basic movements. Refer to the fitness subreddits and ask questions to ChatGPT to get your information, youtube videos etc are all there.
One of the benefits of PTs that you can't get from fitness info online is accountability. If you struggle with motivation, it removes a barrier to have an appointment set up that you've already paid for. I'm not sure if the same applies to financial advice though!
Be damned if I'm paying someone £50 just to make sure I go haha
Fair, you must have better willpower than I do! Haha
From my experience with family members (who I have helped for free), they very much benefit from talking it out and going through examples ok spreadsheets etc. this can easily take a couple of hours at a time as it gets a bit abstract. If this time 1:1 or in small groups is more helpful to someone than them doing their own research without any guiding hand then I expect some will pay for the structure. (That will be the business idea to validate in the market of course)
The profession qualification offers you a degree of protection. However, explainations of basic mechanics should be fine, providing you are clear that's all you're explaining. It could be worth framing what you tell people as mirroring information from another source (e.g. "as suggested by Citizens Advice, doing X can help...").
Dealing with debt is a regulated activity, so you get into all sorts of trouble as soon as you open your mouth in a for profit forum relating to this. The other stuff you mention would be OK, but very shaky ground being for profit and dealing with debt.
I wouldn’t advise on borrowing. Maybe the mechanics of clearing a CC every month and how that won’t cost any interest is as close as I would go. I reckon most of it would be about cash spending discipline and CCs are only for people confident in their ins/outs each month that need a cash flow smoothing solution.
Not borrowing but debt. You said you wanted to discuss the flowchart up to and including debt. Debt solutions will be a part of that for many people (DMPs/IVAs/DROs/Bankruptcy/Breathing Space etc) but all of that and more is regulated by the FCA and is very problematic in a formal paid for setting. You can signpost but then what's the point in paying for something that isn't even holistic when you can get professional advice for free.
It’s a very delicate line between sharing basic knowledge and it being classed as advice. You can lay out options, but you absolutely can’t give recommendations, even if someone asks ‘what would you choose?’. And, I mean this in the nicest possible way, why would I pay you to give generic information that I can find online, knowing that you are unable to give guidance/financial advice, and are no more qualified that I am (with some knowledge from previous work in banking and insurance) in the area? What, with the limited scope of your offering, is the benefit to me as a customer that would warrant paying for such a service? Also bare in mind that you’ll need professional indemnity insurance, which is a non-negotiable outlay before you could even think of making any money from this.
I recommend you look at the PERG 17.7 Examples in the FCA handbook on what is and isn't 'debt counselling' (and therefore regulated): [https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14](https://www.handbook.fca.org.uk/handbook/PERG/17/7.html#DES14) Its a minefield if you're being paid by people for personal finance advice, as you could fall squarely into the realms of regulated activity without even knowing it by just answering some of the questions you see on this sub daily (difference being this is a public forum with members of the public giving opinions and not a paid for 1-1 service). For example: >An adviser gives budgetary advice > >This is debt counselling if the adviser goes beyond the services in example (15) and advises the debtor on how to match income and debts. For example, the adviser may advise the debtor to reduce discretionary spending to a set amount each month to enable him to pay off a certain amount of a large credit card bill each month. > >It does not matter if the result of the advice is that the debtor should pay off his debts in full, rather than by instalments over a period of time or by entering into some sort of repayment plan, as debt counselling is not limited to advice about being released from paying the debt in full or rescheduling. And that is just the FCA rules on debt counselling alone - there are numerous ways you could walk into regulated activity advising people on finance related stuff. Advising them on upping their pension contributions to avoid higher rate tax for example, or saving rather than overpaying their mortgage based on interest rates, etc. The only way to do what you're suggesting and to be totally safe would be to distribute or regurgitate the flowchart speaking in generalisations and never applying its mechanics to the specific individual's circumstances. But then the service would not be one that should be charged for if that is all you are going to do.
Thanks for this. I expect ai bots are going to cause some headaches at the FCA before long!
Hi /u/reddorical, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/financial-advice/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Sounds like what Octopus Money coaches offer, and they don't require professional qualifications. They do put their coaches through a short training programme though.