Relaunch Investment Suitability

4 Need for Action in Practice
It will take several years to incorporate investor protection within
Switzerland’s own financial services law. Nevertheless, Swiss
financial institutions are well advised to address the issue of
Investment Suitability in the short-term, to check their advisory
systems and processes for possible alternatives and evaluate
initial adaptations. This also applies to institutions active only
in Switzerland, be it because obligations can result from Swiss
civil law, or because FINMA has announced stricter controls.
Investor protection is an even higher priority for financial
institutions pursuing cross-border activities and confronted with
Value chain implications
Client
Investment
goals
Front/client advisor
Customer
knowledge
and experience
Risk profile
and financial
situation
Obtain
information
External
documentation
Know your customer 5 Advisory process Risk disclosure
Product management
6
4
18 Ernst & Young Relaunch Investment Suitability
5
6
1
Client Transaction Portfolio
1 3 6
Competence of the
client advisor
Product due diligence Product documentation 1 5 Sales restriction 4
Product classification
Product selection
risk-based complexity-based
Vendor
1
4
5
Investment proposal
Classification in asset classes
Internal vendor External vendor
foreign regulations as a result. It should also be emphasized that
compliance with regulations regarding investor protection not only
leads to risk reduction, but also results in quality improvements
in the consultation process. Financial institutions get to know
their clients better, are in a position to give effective advice, and
transparency increases. In other words: Those who adapt their
processes at an early stage can gain competitive advantages in the
financial marketplace.
Point of sale/investment recommendation 2 3
Vendor/
sales organization
Pull
Push