Glossary
Suitability Assessment
The Suitability Assessment is the obligation of a financial services provider, before providing Investment Advice that takes the client portfolio into account, or Discretionary Asset Management, to ensure that the recommended service or financial instrument is suitable for the client's financial situation, investment objectives, Risk Profile, and knowledge and experience (Art. 12 FinSA).
At a glance
- The Suitability Assessment applies to Investment Advice that takes the client portfolio into account and to Discretionary Asset Management; it is more extensive than the Appropriateness Assessment and also covers the client's financial situation and investment objectives (Art. 12 FinSA).
- If the information is insufficient for an assessment, the financial services provider informs the client before providing the service that it cannot carry out the assessment; if it considers a financial instrument unsuitable, it advises the client against it.
- The financial services provider documents the services agreed and the information collected about the client; on request, the client receives a copy of this documentation.
Frequently asked questions
The Suitability Assessment (Art. 12 FinSA) is more extensive and applies to Investment Advice that takes the client portfolio into account and to Discretionary Asset Management: it takes into account investment objectives, financial situation, risk capacity, and the client's knowledge and experience. The Appropriateness Assessment (Art. 11 FinSA) is narrower and only assesses knowledge and experience, not the client's overall financial position.
Part of the topic
Financial Advice
Sources: FINMA · Classified Compilation (fedlex)
This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.