An Insight Into the Suitability Practice : The Standard Questionnaire Dilemma
With the introduction of the MiFID, the European Regulator has formalized the need for financial firms to get to know their customers. To do this, the Directive requires financial operators to assess the suitability and appropriateness of any financial service or product that is proposed to a client. Depending on the result of the suitability and appropriateness questionnaire, investors can be provided with different services and products according to their needs. Unfortunately, the Directive only dictates general rules and each financial firm makes use of its own questionnaire that is likely to be different from its competitors'. Our analysis focuses on the differences that characterize the MiFID questionnaire across financial firms with both a descriptive approach and an empirical approach. In the descriptive approach, we examine the content of 14 Italian questionnaires in order to highlight the main divergences and similarities in the contents of the questionnaires. The business model of the financial firm but also the competence of the front-office employees and the conduct of the compliance function are possible explanations for the different structure of the questionnaires. In the empirical approach, we investigate how reliable MiFID questionnaires are, in terms of the consistency of profiles that come out when they are filled up by the same person. In brief, three different questionnaires are sent to 100 potential investors (who are requested to fill all of them up) to verify the consistency of the profiles that are obtained. Our results show that, depending on the questionnaire that is used, at least for some subjects, the profiles obtained by the same person across the three financial firms vary. This is likely to derive from the differences in the contents and scoring methods of the three questionnaires as highlighted in the descriptive analysis. As a consequence, a dilemma about the opportunity of imposing a single suitability questionnaire to all intermediaries arises as it is discussed in the conclusions
Year of publication: |
2011
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Authors: | Mazzoli, Camilla |
Other Persons: | Marinelli, Nicoletta (contributor) |
Publisher: |
[2011]: [S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (19 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 10, 2011 erstellt |
Other identifiers: | 10.2139/ssrn.1853230 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013124596
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