The FCA, the UK financial services regulator, is responsible for maintaining and enforcing standards for investor risk profiling.
The regulations relating to investor risk profiling were introduced in 2012, in the form of the Retail Distribution Review (RDR). The requirements have been elaborated in FG11-05 and in chapter 9 of the Conduct of Business Sourcebook(COBS).
The 2018 introduction of MiFID II by the European Securities and Markets Authority (ESMA) expanded the coverage of compliance to include fintech start-ups and robo-advisers. The FCA is committed to enforcing the standards set within MiFID II.
Our investor risk profiling tools are fully compliant with all suitability standards set and maintained by the FCA, including RDR and MiFID II regulations.
Despite the UK's approaching departure from the EU, any firm operating in European markets or working with European clients will have to comply with MiFID II. Depending on the final departure agreement, this EU legislation may also be retained for organisations operating solely within the UK.
To determine suitability, the risk profile of the investor must be established and then mapped to an investment delivering appropriate risks. Compass from Oxford Risk sets a new best-practice benchmark in suitability assessment. By providing deep insights into investor psychology, Oxford Risk's tools help advisers to satisfy regulatory requirements while creating opportunities for greater investor engagement throughout the investment journey.
We are committed to developing and improving investor risk profiling standards and maintain a close relationship with the FCA. Professor Lord John Krebs, Chairman of Oxford Risk's board, delivered the inaugural keynote of the FCA Insight lecture series.