The FT Advisor ran a story on Suitability and the advice process under MiFID II yesterday.
Author Greg B Davies PhD
Date 10th November 2017
The article outlined the requirement under the new directive of assessing suitability every time advice is provided, retaining a record of the report, and conducting an annual suitability review. It goes on to assert that MiFID II will also consider the increase of robo-advice.
Essentially, MiFID II is being put into place to ensure due diligence is conducted correctly, provide better protection for investors, reduce the likelihood of a reoccurrence of the 2008 financial crisis, and stabilise the member states’ markets.
The problem many advisor firms face is achieving compliance by January 3rd 2018. In June 2017, FX-MM reported that 90% of firms were at either “medium or high risk” of not being compliant by the deadline.
Creating a suitability assessment, recording reports, and re-calibrating annually is no easy task; which is where Oxford Risk can help.
Non-compliance could incur penalties from the FCA, if you are concerned about this, we strongly urge you to explore Oxford Risk Rating Online (ORR Online). ORR Online is the industry-leading risk tolerance assessment platform that deals with suitability, appropriateness, and records the results of every assessment for future review. We also annually re-calibrate the suitability report as part of our standard offering.
ORR Online can be used by all forms of advisory firms, including individual IFAs, large international banks, and robo-advice platforms.
To discuss ORR Online, and become MiFID II compliant, please get in touch.