1. MIFIDII

2. Introduction Taking effect from 3 January 2018
Some rules apply to all IFAs
Extended rules for firms with discretionary management

3. Key Areas for Advisers Suitability Telephone recording
Fund value change reporting
Periodic reporting
Charge Disclosure
Inducements
PRIIPS and KIDs

4. Suitability
Suitabilty letter prior to transaction being completed – we will be sending pre-application
Annual Suitability Assessment and Report
Assess circumstances
Assess needs and objectives
Assess ATR and capacity for loss
Assess any other changes
Review existing plans for ongoing suitability
Review investments for ongoing suitability – fund research for non-models
Bring all above together in suitability report
Telephone based annual meeting for Prime clients

5. Telephone Recording
We will record all telephone calls – landline and mobile
New cloud based telephone system
New mobile phones
App on mobile phones to enable recording
Other electronic – texts, , messages etc must also end up on IO
All client instructions will be recorded (by person taking instruction) on new Client Instruction Form

6. Fund Value Change Reporting
Where overall value of the portfolio, as evaluated at the beginning of each reporting period (Quarter), depreciates by 10% and thereafter at multiples of 10% - we must report to the client no later than the end of the business day in which the threshold is exceeded or, in a case where the threshold is exceeded on a non-business day, the close of the next business day – Discretionary portfolios only.
System in place to capture data from Amber, Nucleus, and 7im
Process in place and tested to report to clients
OM Wealth Select – OM report to us not clients, we will report to clients

7. Periodic Reporting For discretionary portfolios
Quarterly valuation reports instead of half yearly
First quarter reports end of March.
Use of Personal Finance Portal (PFP)

8. Charge Disclosure
Firms must also fully disclose, in a manner that is “fair, clear and not misleading”, all costs so that a client can fully understand the nature and costs of the services being provided to them.
Costs and charges include the cost of funds, platform, product charge, advice and any third party charges such as DFM fees.
At point of advice and annually thereafter
Firms must disclose in £ and %.
Annual disclosure – first quarter 2019

9. Inducements
MiFID II restricts the possibility to receive or retain inducements from third parties.
For S&P, only minor non-monetary benefits are permitted so long as they are disclosed and they enhance the quality of service provided to the end client.
ESMA defines minor benefits - Reasonable and proportionate and unlikely to influence the recipient’s behaviour
S&P – under £50 ok without permission, >£50 need permission
All gifts need a form

10. Inducements continued
£1,000 limit per provider per calendar year
Clients can ask for information
Disclosure in TOB
Restrictions:
Accommodation
Travel
Meals without training/seminar
Sporting events, entertainers, etc.

11. PRIIPs and KIDs
The Packaged Retail and Insurance-based Investment Products regulation (PRIIPs) – comes into effect on 1 January 2018.
ISA and pension not PRIIPs
We are required to provide a KID to all clients when recommending a product that is classified as a PRIIP.
Clients will also get a KID for each fund within a PRIIP or non-PRIIP
KID exclusion for Discretionary Fund Managers
Model fund KIDs signposted in SL and will be on website
Fund KIDs may not replace KIIDs until Jan 2020
No KFD or KFI for PRIIP