MiFID II, or to give it its full name, the second Markets in Financial Instruments Directive, aims to:
For client’s investing in ETIs, we require the following information to be completed on the platform.
Firms using Wrap or Elevate under advisory permissions only
In addition to requesting the information above for individual clients and trusts, we also require the LEIs for discretionary firms and the NIs for key decision makers within those firms.
Discretionary firms using Elevate, Wrap or Wrap's Investment Hub are able to input this information on the platform.
Firms using the Investment Hub under advisory permissions are not required to provide an LEI / NI for key decision makers for their firm. However, we require the information as outlined above for individual clients or Trust accounts regardless of which product the investment is held through.
Our platforms have been updated to enable advisers to provide and check the relevant identifiers.
If you believe you need to obtain a LEI there are a large number of service providers who are authorised to issue and administer LEIs, further information on providers can be found online. Note that LEI applications carry an initial application cost and annual renewal costs.
Discretionary managers (DFMs) and advisers with discretionary permissions are obligated to provide quarterly client reporting. Clients must also be informed of depreciations in the value of their model by 10% (and any subsequent 10%) within each reporting period.
For both Wrap and Elevate, a document which details the valuation drop (in relation to Investment Management Hub portfolios on Wrap and DFM portfolios on Elevate) will be generated in your client’s document library within their platform account and we’ll automatically inform advisers/discretionary managers about the 10% drop and which clients are affected.
Clients are also to be informed when the unit price of their investment in a ‘leveraged instrument’ drops by 10% (and any subsequent 10%). The vast majority of assets on our platforms are not defined as leveraged.
Underlying ISA / Personal Portfolio investments which are PRIIPS will, in the majority of cases, have a KIID or KID, available on the platforms. For those which do not, please source the KID directly from the provider's website.
On Elevate, access to appropriate fund documentation is available in the IST and research screens.
MiFID II requires you to provide your clients with aggregated information both pre-sale and post sale.
Pre-sale we take all the relevant information from fund managers and present through a charges information document. We also make this information available post-sale on an annual and ad hoc basis.
We also show the discretionary manager fees through the same documents.
Transaction level detail for discretionary models are confirmed in the contract notes.
MiFID II requires fund managers to decide and clearly articulate the target market for their products. They monitor sales to ensure their products are being recommended to the right people.
As a result, advisers must be clear on their target clients and understand the appropriate products and distribution method for them.
abrdn will bring together target market data from fund managers, as well as help provide the data required by fund managers to monitor sales.
This is about formalising best practice for assessing and reporting on advice to hold a particular fund. The regulation creates a requirement to repeat this each year if your advice is ongoing. It’s worth considering whether you could improve your ‘know your client’ process. Or perhaps review how often you check a client’s attitude to risk and whether there are any specific trigger points (like at retirement).
abrdn provides easy access to the investment information advisers need to help support suitability assessments.
If you still have questions then please speak to your usual abrdn contact or contact us on
0345 279 1001.
Call charges will vary.
You can find answers to a wide range of popular policy, product and servicing questions in our help and support section.