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Best Practices in Client Suitability

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Despite heavy investments in suitability enhancement programs, financial institutions fall short when it comes to delivery of results. Lack of success can be attributed to ignoring the key best practices required to achieve the desired results. Only a deep and continuous understanding of clients enables the right selection of investment and insurance products. Financial institutions need to be more proactive as suitability is greater than just selecting the right products; it is about continuous duty of care towards clients.

Here are the best practices in client suitability implementation:

Ensuring Suitability Is A Must

With rising demand for better wealth management products and protection, there is growing need to strengthen the protection of investors who may possess limited knowledge in wealth management products. Wealth managers should monitor portfolios on a daily-basis and ensure all important financial information and client circumstances are documented and accounted for. One of the best practices to adopt is to review suitability of portfolios to individual circumstances of clients. The bar is set higher for financial institutions to demonstrate a duty of care towards clients, advice, and recommend suitable products.

Beyond Adhering to Rules and Regulations

Financial institutions will continue to face regulatory pressures to go beyond just meeting requirements and “checking boxes” to shifting towards evolving business models, to drive customer and advisor experience.

Prioritise Customer and Advisor Experience

Shift the focus from administration and compliance to advisor and customer experience. Clients should be placed at the heart of all matters—marketing, sales, advice processes. By doing so, you’ll be a step ahead on suitability.

Technology – A Key Enabler

Investments in digitisation efforts should be focused on assisting advisors. Clients today demand for a seamless omni-channel experience and adopting the right technology will help financial institutions win the next generation of investors.

Financial institutions need to ensure their governance and monitoring are sufficient and that portfolio truly the risk appetite and needs of their clients. Poor implementation of these practices can prove costly and lead to expensive remediation exercises.

Free Download: Suitability Kit

Suitability – one of the cornerstones of customer protection. With increasing expectations for better protection and assortment of wealth management products, wealth managers view suitability as a pressing issue.

Find out the five pillars of a suitability framework that’s effective, and how we can help you get ahead in this FREE downloadable Suitability Kit.

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