The FCA’s consultation paper regarding streamlined advice came out last week (https://www.fca.org.uk/publication/guidance-consultation/gc17-04.pdf)
The key takeways from the 51 pages are:
“MiFID II contains obligations which require a product distributor to
“Some financial products are also unlikely to be appropriate for a streamlined advice process because of the amount of information likely to be needed by the firm in order to make a suitable personal recommendation to a retail client. In general we would expect that the more complex, highly concentrated or illiquid the product, the more likely it is that firms will need more information about the client’s broader portfolio in order to meet the firm’s suitability obligations.”
“The suitability assessment is a firm’s responsibility and a firm should avoid indicating to the client that a certain financial instrument is the one that the client chose as being suitable, or requiring the client to confirm that an instrument or service is suitable.”
“We would remind firms that they are responsible for ensuring that their personal recommendations are suitable.”
“if a firm expressed its opinion of the importance or merits of the features of a product, this would be likely to amount to giving regulated advice”
Our assessment of these key points are:
If streamlined advice is to exclude products that use leverage, lack diversification and/or carry high levels of liquidity risk, should all property funds, smart beta and conviction funds be excluded? Probably not. It is more likely that advisers need to understand the levels of leverage, concentration, liquidity etc in the products they recommend.
This is consistent with past FCA publications – FCA SYSC 8.1.6R, CP12/09, TR15/12 and TR16/01 – removing any ambiguity about who is responsible for ensuring that the end clients’ needs and risks are compatible with the financial instruments recommended.
Sections 4.20 and 4.24:
AssetQ delivers exactly what advisers need – the means to swiftly understand the features of the products they recommend so that clients’ needs and risks are matched in a consistent, audited and FCA compliant manner.
The information contained in this website is for general information purposes only. The information is provided by sigMacity Limited and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. The Trademarks on the website are the property of the respective organisations and are used under licence.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of sigMacity Limited. We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, sigMacity Limited takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.