The FSA has issued finalised guidance on ‘Assessing suitability’.
The requirements regarding ‘Suitability’ can be found in COBS 9.2 and apply to a firm which makes a personal recommendations and/or which manages investments. Although the ‘Overview’ suggests that the guidance will be relevant to firms with retail customers, it is worth bearing in mind that the suitability requirements also apply to professional clients in respect of MiFID business (although COBS 9.2.8 permits a firm to assume certain criteria when dealing with a professional client).
The guidance includes selected examples of good and poor practice including comment on the use of standardised allocation models by discretionary investment managers (page 21).
Readers may also be interested in the article in this Regulatory Roundup on the FSA Business Plan which reveals the FSA’s continued interest in discretionary and advisory investment management services in the light of ‘suitability’.
