Having required Firms to bombard Clients with mountains of information in a prescribed manner for many years finally common sense has prevailed. Most of the "bumpf" rarely gets read by consumers and often finds its way into the wpb. How many trees have been sacrificed in the name of "investor protection" I wonder?
The latest "final" statement still leaves a number of unanswered questions. COB's 9.4 might be extended to cover additional asset classes in the future. Here, the FSA are talking about suitability reports to retail clients covering unregulated collectives; CFD's and certain structured products.
The paper also makes reference to the relaxation in the rules concerning "wealth warnings". Firms are reminded to only use those that are appropriate and relevant to the specific Financial Promotion. If you are not quoting past performance data then there is no need to state "past performance is not a guide to the future". Firms can also target their marketing towards specific market segments and use appropriate language - but few are at present.
Interstingly, the Paper highlights current FSA thinking on unsuitable advice :
The customers needs and circumstances have not been met;
The recommended Product exposes the customer to an inappropriate level of risk including overconcentration of assets in a single product or product type.
Recommendation failed to meet the customers tax needs
Are you able to demonstrate on your client files that the outcomes meet client requirements?
No comments:
Post a Comment