Knowing The Customer
Before providing a product or service to a consumer, a regulated entity must gather and record sufficient information from the consumer to enable it to provide a recommendation or a product or service appropriate to the consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service.
This requirement does not apply where:
The consumer has specified both the product and the product provider and has not received any advice.
Suitability
A regulated entity must ensure that, having regard to the facts disclosed by the consumer and other relevant facts about that consumer of which the regulated entity is aware:
a) any product or service offered to a consumer is suitable to that consumer
b) where it offers a selection of product options to the consumer, the product options contained in the selection represent the most suitable from the range available to the regulated entity; or
c) where it recommends a product to a consumer, the recommended product is the most suitable product for the consumer
This requirement does not apply where:
The consumer has specified both the product and the provider and has not received any advice.
I think it is important to stress the difference between Execution Only Services and Advice Services from regulated entities. Some requests to advisors fall between these two stools and, sometimes the line that divides them is smudged to accommodate a transaction. It's either black or white.
Before providing a product or service to a consumer, a regulated entity must gather and record sufficient information from the consumer to enable it to provide a recommendation or a product or service appropriate to the consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service.
This requirement does not apply where:
The consumer has specified both the product and the product provider and has not received any advice.
Suitability
A regulated entity must ensure that, having regard to the facts disclosed by the consumer and other relevant facts about that consumer of which the regulated entity is aware:
a) any product or service offered to a consumer is suitable to that consumer
b) where it offers a selection of product options to the consumer, the product options contained in the selection represent the most suitable from the range available to the regulated entity; or
c) where it recommends a product to a consumer, the recommended product is the most suitable product for the consumer
This requirement does not apply where:
The consumer has specified both the product and the provider and has not received any advice.
I think it is important to stress the difference between Execution Only Services and Advice Services from regulated entities. Some requests to advisors fall between these two stools and, sometimes the line that divides them is smudged to accommodate a transaction. It's either black or white.