Making markets more efficient and effective, whilst at the same time reducing systemic risk and improving investor protections are key goals of MiFID II, MiFIR and EMIR. Interoperability and open market access are key regulatory principles being driven out to achieve these outcomes.
The Financial Conduct Authority (FCA) holds that inadequate research and due diligence are 1 of the 3 root causes for poor consumer outcomes. Proper due diligence is therefore vital if retail clients are to be given advice that is suitable. What does that look like, what controls and processes need to be in place to support good research and due diligence?
Instinctively, there might be an expectation that it is the Financial Advisers/Advisory firms who are solely responsible to meet the suitability requirements of their retail clients. However, due to the complex nature of financial services and products these obligations might blur between Financial Advisers and those Discretionary Investment/Fund Managers who manage the investments of retail clients. Without proper care a “suitability” gap can emerge.
MiFID II will impact not only a very large number of Financial Services firms who operate in the European Union but is likely to have a significant impact on their business and operating models, processes and IT systems.
What practical steps can wealth management firms take if they are to win the trust (and business) of the next generation? This landscape survey done by Compeer highlights some important differences that decision makers might wish to consider in formulating their value propositions and strategic responses to this sector.
There are many demands placed on the business systems used by Financial Services firms, which often pulls these systems in multiple directions due to these different priorities. If data is a strategic asset, then how should Financial Services Firms realign and then deliver an enterprise-wide data transformation programme?
Following the global economic crisis sparked initially in 2008 there has been a marked increase in regulation across the Financial Services sector. This new landscape requires that Financial Services firms make fundamental changes to their business systems.
Guidance and advice are fundamentally different activities that asset or wealth managers must respond to differently. They require different operating models, each with divergent methods of client acquisition, engagement and management.
Suitability is the process by which wealth managers establish whether the investment proposition they put forward is right for clients. The FCA has put suitability at the top of its agenda to ensure that clients get what they expect and wealth managers are better placed to manage these expectations.
Blockchain is the underlying technology that today supports the cryptocurrency, Bitcoin. Its primary benefit is that it establishes a non-repudiable way of settling transactions.