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Are Advisers Prepared for MiFID II?

09/10/17

With the implementation of MiFID II now just months away, many advisers have been concerned that there’s a lack of clarity around a number of rules. A recent survey by discretionary fund manager Smith & Williamson indicated that 73% of advisers did not feel they had enough clarification to prepare for the implementation of MiFID II next year.

Commentators have mentioned the need for clarity around cost disclosure and that the FCA has missed an opportunity to make changes to its illustrations. Many advisers are being prompted to clarify their agency agreements with DFMs which could raise issues under MiFID requirements, where advisers must inform clients when a discretionary portfolio value falls below 10%.

The FCA has published two MiFID II policy statements this year, with the first outlining the market and organisational requirements and the second including rules around conduct, research, inducements and client assets.

In its first policy statement, the FCA amended its requirement for Article 3 firms to tape phone calls relating to an order, instead, firms can now take written notes of the call.

TCC’s Technical Director, Phil Deeks, highlighted that the FCA’s requirement for written notes will still place a great demand on firms. Firms will have to make sure they record the details such as the date and time of the meeting, its location, who attended, who initiated as well as other details about the price, volume and when orders will be completed.

Phil also highlighted that recording will help firms with MiFID II but it also will assist firms with demonstrating suitability as they will have an exact record of what was said, which may be needed further down the line.

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