The definition of what constitutes advice is still unclear and innovation in financial services is being stifled by a fear of being penalised for attempting something new, firms have told the FCA.

The regulator has been told that the overwhelming pace of regulations and "outdated and complex" rules have been a barrier to more innovative products.
Smaller companies, in particular, have stressed the constraints they feel under the current system.
Businesses have been offering their opinions as part of Project Innovate – an FCA initiative aimed at helping both start-ups and established businesses bring innovative ideas to financial services markets.
The regulator has summarised its feedback from a series of roundtable discussions.

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The FCA's report on the events stated: "The definition of what constitutes advice was cited as an example of where firms are still not clear where they stand despite attempts by the regulator to resolve this.
"One participant observed that many firms would simply ignore regulations that they cannot understand."
Regarding issues preventing innovation, the FCA found: "Participants felt that we do not engage early enough with firms and provide limited feedback or reassurance, generating uncertainty that can stifle innovation.
"There is a fear of being reprimanded for attempting something new.
"There was a perception that many often relied on having a strong relationship with an individual in the FCA, creating an unfair advantage for established firms.
"The approach taken across FCA divisions and individuals was also seen as inconsistent."
The "unpredictability" of the Financial Ombudsman Service was also "cited as a barrier to innovation" according to the report.
It said: "Participants were particularly concerned that FOS can rule against firms even where they have complied with the relevant FCA rules."
Respondents said the situation has improved since the FCA took over from the FSA.
But the report added: "It was felt that more can be done to adapt to market developments and changing times more quickly, with examples given of digital signatures and crypto-currencies.
"Our tone could also be more supportive and guidance would be more useful if less abstract and if it used more examples of good and bad practice."