Two half-days for advisers, discretionary fund managers and compliance staff
INTRODUCTION
Course objectives
The role of compliance in the advice process
Benefits of good fact-finding and suitability letters
Risks of non-compliance
MiFID and non-MiFID business – finding the rules
THE SCOPE OF THE SERVICE
Choosing clients
Agreeing the scope of advice – full or focused advice
No personal recommendation relied upon – generic, execution-only and insistent customers
KNOW YOUR CUSTOMER
Understanding existing investments and arrangements
Risk-profiling – and the various types of customer and product risks
Partially completed forms
SUITABILITY
COBS 9 and 9A and how they work
Understanding the scope of the mandate
Know your product – researching and selecting what to recommend
Balancing elements with different risk profiles
Use of non-correlated asset types and compliance risks
General suitability issues
Mixing investments and protection
Uses of platforms
Duty to review existing investments
Leverage
Non-standard assets
Particular Product Problems
Analysing funds
Identifying assets and compliance risks within
Tax and other wrappers
Uses of derivatives
Absolute return offerings
Pensions issues
Unsuitable Customers for Pensions
Transfers, opt-outs and non-joiners – Occupational Schemes, workplace pension schemes, existing personal pensions
Drawdown
Annuities
SIPPs
CONSTRUCTING A COMPLIANT SUITABILITY REPORT & OTHER DISCLOSURE REQUIREMENTS
Regulatory requirements – disclosure of mandates and risks and suitability reports
Form – concise, readable, clear
Substance – explanation for why product recommended and disclosure
Live demonstration of such a letter
MONITORING ADVICE AND DISCRETIONARY FUND MANAGEMENT STANDARDS
Compliance obligations under SYSC
Core risk management
Competent employee rule
KPIs and management information that is useful
Spotting future problems – indications
Taking action when things go wrong