Suitability and appropriateness: Difference between revisions
Amwelladmin (talk | contribs) Created page with "{{a|ukregulation|}}In the pantheon of conduct regulation, suitability and appropriateness are two tests one must do on clients to understand whether a product you propose to sell it is, well “suitable”, and “appropriate”, for that client. {{d|Appropriateness|/əˈprəʊpriətnəs/|n|}} Appropriateness is an assessment of ''expertise'': if a client has '''sufficient knowledge and experience''' of the product or service in question, it will be “appropriate” f..." |
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{{d|Suitability|/ˌsuːtəˈbɪləti/|n|}} | {{d|Suitability|/ˌsuːtəˈbɪləti/|n|}} | ||
Suitability is a more comprehensive assessment of the client’s financial situation, investment objectives, knowledge and experience and risk tolerance, but it only applies to investment advice and portfolio management services. | Suitability is a more comprehensive assessment of the client’s financial situation, investment objectives, knowledge and experience and risk tolerance, but it only applies to investment advice and portfolio management services. | ||
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*{{plainlink|https://www.handbook.fca.org.uk/handbook/COBS/10A/|FCA handbook on appropriateness}} (as of August 2024) | |||
*{{plainlink|https://www.handbook.fca.org.uk/handbook/COBS/9A/|FCA handbook on suitability}} (as of August 2024) | |||
Revision as of 10:37, 22 August 2024
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The JC’s Reg and Leg resource™
UK Edition
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In the pantheon of conduct regulation, suitability and appropriateness are two tests one must do on clients to understand whether a product you propose to sell it is, well “suitable”, and “appropriate”, for that client.
Appropriateness
/əˈprəʊpriətnəs/ (n.)
Appropriateness is an assessment of expertise: if a client has sufficient knowledge and experience of the product or service in question, it will be “appropriate” for that client. It applies to a wide range of clients and activities that are “non-advised” — including simple receipt and transmission of orders for “complex” products, though professional clients are deemed to have expertise.
Suitability
/ˌsuːtəˈbɪləti/ (n.)
Suitability is a more comprehensive assessment of the client’s financial situation, investment objectives, knowledge and experience and risk tolerance, but it only applies to investment advice and portfolio management services.
See also
- FCA handbook on appropriateness (as of August 2024)
- FCA handbook on suitability (as of August 2024)