The provisions of FIDLEG apply for all those (financial service providers, consultants) whose professions involve the provision of financial services in Switzerland or for clients in Switzerland.
This means that every financial intermediary who offers a client a financial instrument must respect the FIDLEG provisions.
The requirements are varied and challenging.
The investment risks must be financially bearable for the client, in consideration of their investment objectives.
The client must understand the risks and be prepared to accept them.
As the service is continually assessed to check the suitability of the recommended financial instruments, the suitability assessment must be repeated continuously for the duration of the consulting or management relationship.
In the future, consulting will only be possible with precise clarification of the circumstances and wishes of the client, and with detailed documentation of the decisions made.
The assets that a financial intermediary manages are no longer the important thing – instead, it is what they don’t explicitly manage that is important.
Investment consulting with the knowledge of the entire portfolio and asset management can no longer be continued as usual. A suitability assessment must always be carried out. The funds that the client provides for the asset management or investment consulting is no longer the only important thing – rather, the financial consultant must, above all, know every single asset that is not being invested or managed.
This creates huge problems not only, but primarily, for banks. When arranging a mortgage, for example, the bank knows the client’s entire portfolio. This means that now, it cannot simply sell more assets to a client without carrying out a suitability assessment.
Seeing the tax return and following up on any wishes of the client in a questionnaire is, in the eyes of many experts, not sufficient.
When providing investment advice having seen the entire client portfolio, or when carrying out asset management, FIDLEG always requires a suitability assessment.