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Your global competitive advantage locally
Impacts on the Information System for distributors of financial products
MIF 2
1st December 2015
Version 1.00
2
TABLE OF CONTENTS
1
0 Introduction
2
Axes of evolution with MIF 2
Impacts on the information systems
3
INTRODUCTION
MIF 2 entry into force is scheduled for January 2018 and aims to enhance
the investors’ protection through an enhanced transparency.
MIF 2 will revolutionize the organization of financial products distribution
including the restriction of management companies’ commissions
retrocessions payment to funds distributors when the latter are declared
as independent. This also applies to outstandings managed under
mandate.
0
4
AXES OF EVOLUTION WITH MIFID 2 FOR
DISTRIBUTORS
1
IMPACTS OF
MIFID 2
1 Client / CRM profiling
• Establish clients risk profile
• Measure tolerance to losses
compared to client actual situation
• Change of situation
2 Product profiling
• Set a segmentation according to the
target market and the client
category
• Define the distribution strategy and
follow adequacy
3 Distribution circuit
• Classify products by risk profile
• Manage distribution mode by
advice capacity typology
4 Information transparency
• Costs display
(advice and
process)
• Provided
services costs
display
8 Permanent report
• Control risk profile/product adequacy
• Report on advice during client
relationship
• Track recommendations
5 Record keeping
• Prove that an advice service existed
as well as a client relationship
follow-up
6 Producer/distributor agreement
• See impacts on the distribution
method (inducement, traceability)
• Reset the contractual enhancements
of the distribution circuit
7 Client agreement
• Set client agreements adapted to
the MIF2 expectations
• Adapt the RTO/under mandate
distribution method
5
IMPACTS ON THE DISTRIBUTORS
INFORMATION SYSTEM
2
Profiling / Segmentation
Risk
profile
Advice
profile
Product
profile
client
collaboratorproduct
compliance
With MIFID 2, we must be able to manage profiles adequacy on 3 axes:
 The client
The client risk profile must be determined according to the financial
products typology.
Moreover, in the client profile determination, his loss tolerance must be
evaluated according to his actual situation.
The latter concept brings a dynamic aspect of data analysis to this profile
management.
 The financial product
Elements transmitted by the producer must be managed in terms of target
market, clients target typology as well as this product’s distribution
strategy. These elements are used to evaluate the level of advice to realize
during sale and during a product cycle.
 The collaborator
This management belongs to the concept of distribution strategy and
advice level expected for the product sale.
6
IMPACTS & INTER-ACTIONS ON DISTRIBUTORS IS
Risk
profile
Advice
profile
Product
profile
client
collaboratorproduct
compliance
CRM
Clients behavioral analysis
Products catalogue
Distribution strategy
CRM
Clients communications
records & traceability
Warnings, arbitration
and audit
Permanent control
2
7
CONCLUSION 2
Enhancements brought by MIF 2 will particularly impact the information system within the financial products
distribution framework.
 The systems must be provided with profiles management that enables to dynamically control the characteristics
adequacy between the client risk profile, the distribution strategy determined at the financial product creation and
the capacity of the distribution network collaborators advice.
 The systems must manage a products catalogue with important information concerning characteristics on the
method of distribution, advice and adequacy compared to network collaborators and clients risk profiles.
 The systems must set a permanent control on the clients investment portfolio evolution compared to their profile
with warnings management, allowing arbitrations when necessary and an audit trail for these financial products
distribution agreements.
 Finally, the CRM tools are also impacted with the clients data dynamic analysis, to establish loss tolerance
regarding clients financial situation, with client relationship recording and traceability.

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Your global competitive advantage locally with MIF 2

  • 1. Your global competitive advantage locally Impacts on the Information System for distributors of financial products MIF 2 1st December 2015 Version 1.00
  • 2. 2 TABLE OF CONTENTS 1 0 Introduction 2 Axes of evolution with MIF 2 Impacts on the information systems
  • 3. 3 INTRODUCTION MIF 2 entry into force is scheduled for January 2018 and aims to enhance the investors’ protection through an enhanced transparency. MIF 2 will revolutionize the organization of financial products distribution including the restriction of management companies’ commissions retrocessions payment to funds distributors when the latter are declared as independent. This also applies to outstandings managed under mandate. 0
  • 4. 4 AXES OF EVOLUTION WITH MIFID 2 FOR DISTRIBUTORS 1 IMPACTS OF MIFID 2 1 Client / CRM profiling • Establish clients risk profile • Measure tolerance to losses compared to client actual situation • Change of situation 2 Product profiling • Set a segmentation according to the target market and the client category • Define the distribution strategy and follow adequacy 3 Distribution circuit • Classify products by risk profile • Manage distribution mode by advice capacity typology 4 Information transparency • Costs display (advice and process) • Provided services costs display 8 Permanent report • Control risk profile/product adequacy • Report on advice during client relationship • Track recommendations 5 Record keeping • Prove that an advice service existed as well as a client relationship follow-up 6 Producer/distributor agreement • See impacts on the distribution method (inducement, traceability) • Reset the contractual enhancements of the distribution circuit 7 Client agreement • Set client agreements adapted to the MIF2 expectations • Adapt the RTO/under mandate distribution method
  • 5. 5 IMPACTS ON THE DISTRIBUTORS INFORMATION SYSTEM 2 Profiling / Segmentation Risk profile Advice profile Product profile client collaboratorproduct compliance With MIFID 2, we must be able to manage profiles adequacy on 3 axes:  The client The client risk profile must be determined according to the financial products typology. Moreover, in the client profile determination, his loss tolerance must be evaluated according to his actual situation. The latter concept brings a dynamic aspect of data analysis to this profile management.  The financial product Elements transmitted by the producer must be managed in terms of target market, clients target typology as well as this product’s distribution strategy. These elements are used to evaluate the level of advice to realize during sale and during a product cycle.  The collaborator This management belongs to the concept of distribution strategy and advice level expected for the product sale.
  • 6. 6 IMPACTS & INTER-ACTIONS ON DISTRIBUTORS IS Risk profile Advice profile Product profile client collaboratorproduct compliance CRM Clients behavioral analysis Products catalogue Distribution strategy CRM Clients communications records & traceability Warnings, arbitration and audit Permanent control 2
  • 7. 7 CONCLUSION 2 Enhancements brought by MIF 2 will particularly impact the information system within the financial products distribution framework.  The systems must be provided with profiles management that enables to dynamically control the characteristics adequacy between the client risk profile, the distribution strategy determined at the financial product creation and the capacity of the distribution network collaborators advice.  The systems must manage a products catalogue with important information concerning characteristics on the method of distribution, advice and adequacy compared to network collaborators and clients risk profiles.  The systems must set a permanent control on the clients investment portfolio evolution compared to their profile with warnings management, allowing arbitrations when necessary and an audit trail for these financial products distribution agreements.  Finally, the CRM tools are also impacted with the clients data dynamic analysis, to establish loss tolerance regarding clients financial situation, with client relationship recording and traceability.