Regulated companies (hereafter, ‘companies’) that provide investment advice must first give their retail clients a suitability statement, in which they set out what their advice consists of and explain why it is suited to the client. The suitability statement is mandatory, even where the advice does not lead to a transaction. The FSMA has noted that companies vary greatly in the way they fulfil this obligation.
The FSMA intends this Communication FSMA_2021_04 (French - Dutch) to further clarify this obligation and provide recommendations regarding what companies must, at a minimum, include in the suitability statement. The FSMA will use this Communication as a guideline in conducting its supervision.
The Communication can also serve as a guide for the preparation of the report on the annual review of the investment advice that companies provide to retail clients along with a periodic suitability assessment or when conducting portfolio management.