The MiFID regulatory regime stipulates that bank employees are to provide the best possible investment advice in respect of financial instruments. Guaranteeing this high standard requires effective communication: The bank has to make sure that the customer is in a position to assess the full consequences of the intended transactions. It is to this end that a comprehensive investor profile is drawn up together with the customer.
In the event that the customer is not willing to furnish the legally required information, the bank is permitted to provide only a limited range of activities.
Comprehensive investor protection cannot be guaranteed without an extensive exchange of information between the bank and the customer.
The investor profile must be drawn up prior to entering into an agreement with a customer. The investor profile must be reviewed and updated every time a new investment transaction is concluded. At the consultation during which the investor profile is drawn up together with the customer, the customer signs his or her profile and receives a copy.
Comprehensive investor profile for "retail customers"
Only an exhaustive investor profile creates the basis required by the relationship manager to offer best possible advice to the customer and recommend financial instruments that comply with the respective customer’s
The information provided by the relationship manager on a financial instrument contributes to giving the customer a fair and balanced picture of the opportunities and risks of the intended transaction. A very important aspect is determining a customer’s risk appetite
Abbreviated investor profile for "professional customers"
MiFID stipulates that an "abbreviated investor profile" is to be drawn up for "professional customers" as well. The customer’s experience and knowledge with respect to financial instruments need not be established in this case, as the required expert knowledge can be taken for granted