<img src="https://certify.alexametrics.com/atrk.gif?account=b2hlr1ah9W20em" style="display:none" height="1" width="1" alt="">
    Login
    Get started

    mifid ii suitability tests

    According to figures released by the Financial Conduct Authority (FCA), over £27bn has been paid out already to those who were missold PPI, with an estimated 64 million PPI policies missold in the UK from 1990 to 2010.

    With MiFID II set to be implemented in January 2018, will clients fair any better when the new regulations take effect?

    Under the new rules, firms are obliged to ensure that when providing investment advice and/or portfolio management, anything that is recommended to their clients must be suitable and appropriate for their needs. To do this, firms must carry out suitability assessments for all recommendations (including buy, as well as sell or hold investments).

    Assess these 3 steps to ensure suitability tests are carried out appropriately under MiFID II:

    1. The client's knowledge and experience - ie the sorts of service, transactions and regulated mifid ii suitability tests investments they are familiar with; the type, volume and frequency of transactions; and their level of education or profession.
    2. Their investment objectives - ie risk preferences, risk profile and tolerance, and the purpose of the investment.
    3. Their financial situation - ie the source and extent of their income, assets (including liquid assets, investments and property), ongoing financial commitments and their ability to bear losses.

    All of this information must be reviewed and updated at least annually for firms providing ongoing advice.

    Leave a comment

    Tick

    eBook: Essential Uncovered

    Skillcast Essentials is our best-selling library and there's a reason for that. Essentials library provides comprehensive coverage of the key compliance / conduct issues that companies in the UK face today.

    Request now

    9 ways to reduce the risk of bribery and corruption

    Corruption affects all countries, rich and poor. It causes instability, inequality, and poverty, eroding national wealth. Despite the UK Bribery Act coming into force in 2011 as one of the toughest ...

    Read More
    Highlights from the GDPR 2019 Summit

    Almost a year on from the implementation of the GDPR, Skillcast held a breakfast forum for its clients at South Place Hotel. During this session, Skillcast gave a breakdown of the new GDPR Library of ...

    Read More
    Compliance Essentials News - May 2019

    Here's a selection of the most informative compliance news stories this month - regulatory announcements, market studies, and stories about compliance lapses and downright disregard of ...

    Read More
    FCA Compliance News - May 2019

    Here's a selection of news stories from the last month that touch upon the people dimension of regulatory compliance. Select the links or scroll down for more details. 3 firms and 5 individuals are ...

    Read More