Increased awareness by investors of financial markets and the continuous development of products and services has led to the need for a high level of investor protection that is consistent across the EU. Not only does this cover product governance in terms of product manufacturing and distribution, but also investment firms must:
- disclose the cost of investment advice
- explain the basis on which they give advice, in particular, on the range of products they consider and whether they provide advice on an independent basis
- tell clients if they will periodically assess suitability
- explain to clients the reasons for advice the firm provides
It also sets out the regulatory framework within which firms providing advice that is marketed as “independent”, by requiring these firms to consider an appropriate range of providers and products. CySEC expects firms to be able to demonstrate that the advice they offer and the portfolios they manage are suitable. And firms need to make sure suitability is not only evidenced in client files but can also be demonstrated across the business.
This is a hot topic for the regulator because they know how common compliance failures are. While there has been some improvement in recent years (due to their focus on suitability), firms still experience issues with poorly documented client files. These can expose both the firm’s customers and the firm to risks.
By not properly documenting a customer’s circumstances, investment aims and risk appetite, you expose them to the risk of loss (and your firm to complaints, fines and redress). And if your files are not up-to-scratch it will likely trigger an even deeper investigation into your firm’s behaviour.
So keeping proper records is crucial. This in-depth workshop will show you how to best evidence suitability and demonstrate that you’re in complete control of client records.
By the end of the programme, participants should be able to:
- Check whether your firm is correctly evidencing and demonstrating suitability
- Understand what advisers and investment managers need to do in order to demonstrate suitability (including risk profiling)
- Identify the systems and controls your firm needs to assess suitability
Ensure your records match the facts – Understand the importance of being able to demonstrate that a client’s file matches their knowledge and experience, financial situation, risk profile and investment objectives.
Reduce negative client outcomes – When you match the right products with the right clients (because you better understand your customer), you reduce the likelihood of things going wrong. Not only does this keep your clients and the regulator happy, you don’t have to pay to correct mistakes.
Prove you offer suitable advice – It’s not enough to offer suitable advice, you have to be able to demonstrate that you do. By following best practice for the collection and storing of customer information, you’ll more easily satisfy the demands of the regulator.
Match clients with the right products – While the primary goal of this training is to ensure your client files are fit for purpose from a regulatory position. Getting your documentation in order will reveal useful information about your client that can help with better targeting of new product sales.
Understand Independent vs Non-Independent Investment Advice – MiFID II makes a distinction between advice on an independent basis and on a non-independent basis. Before providing advice, an investment firm must inform a client whether this advice is being provided on an independent or a non-independent basis.
The programme is designed to deliver knowledge and enhance participants’ skills via shot presentations and practical examples. Participants will benefit from feedback at the end of the programme and take away knowhow that can be transferred to their workplace.
Who Should Attend
The programme will benefit those who need to know and understand the Product Governance, Suitability Assessment and Independent vs Non-Independent Investment Advice framework and will be of particular benefit to:
- Product Development Staff and Technical specialists involved in product development
- Compliance Officers and Staff
- Sales, Marketing and Business Development Executives and Staff
- Customer Relations and Customer Service Staff
- Risk Managers
- Internal Lawyers
- External Lawyers
- Financial Consultants
- Any person who provides investment services