Suitability and Appropriateness of Investment Advice

Suitability and Appropriateness of Investment Advice

Faisal Sheikh

25 years: Wealth and risk management specialist

In this video, Faisal discussed the two types of assessment that advisors working in this space are required to carry out, namely the "suitability test" and the "appropriateness test." He also explained the circumstances in which these tests apply and how exactly they are performed.

In this video, Faisal discussed the two types of assessment that advisors working in this space are required to carry out, namely the "suitability test" and the "appropriateness test." He also explained the circumstances in which these tests apply and how exactly they are performed.

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Suitability and Appropriateness of Investment Advice

9 mins 11 secs

Overview

For a wealth manager to be able to give investment advice to a client, the client has to undergo suitability and appropriateness assessments first. Suitability requirements include checking the client's knowledge and experience, their financial situation, and their objectives. Appropriateness requirements also includes understanding the client's relevant knowledge and experience in certain financial instruments. Their past performance enables the wealth manager to judge whether the financial services and instruments envisaged for the client are appropriate for them.

Key learning objectives:

  • Understand the Suitability Assessment requirements and how is it performed

  • Understand the Appropriateness Assessment requirements and how is it performed

  • Understand the Investment Advice record keeping requirements for Wealth Management firms

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Summary
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Expert
Faisal Sheikh

Faisal Sheikh

Faisal is a wealth management professional has spent almost 30 years working in the field of risk management, risk control, internal auditing in the financial services and public sector. Most recently, Faisal was the Head of Risk for the Wealth Management business of UBS in the UK. He has also extensive international experience across Europe, the Americas, Asia and Africa. He has also a served as CISI operational risk expert panel member.

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