MiFID II requires suitability reports for all advice provided to retail clients, regardless of the type of financial instruments (e.g. even directly held shares and bonds). Our clients are telling us this is prompting them to review the ongoing viability of their advice and dealing and advisory managed services.
You must issue the report before the transaction, unless your advice is provided over the phone or online and the client agrees on each particular occasion to receive it afterwards. Also, the mandatory content of suitability reports under MiFID II is different from what we’re used to in the COBS rules that have applied to advice on retail investment products.
Some firms offering advice and dealing and/or advisory managed services have been struggling to produce suitability report templates which meet the MIFID II standards, but which are not too time-consuming to use for each advice event, or too lengthy or indigestible to be helpful for clients. We’ve recently helped several such firms by drastically shortening and simplifying the draft MIFID II suitability report templates they had been intending to use to make them less onerous and more user-friendly. If you are facing similar difficulties, please get in touch – we can help.