MiFID_II_EN

15 MiFID II distinguishes between investment advice on an independent basis and investment advice on a non-independent basis. From now on, your financial institution will have to clarify whether it pro- vides advice on an independent or non-independent basis. Both kinds of advice are of equal value. What is more: a single institution can provide advice on both an independent and non-independent basis. However, an independent investment advisor will have to take a few additional meas- ures to prove to his clients that his advice is not limited to the firm’s own products and that he is not granted financial incentives to recommend own products instead of products provided by a third party. Investment advice provided on an independent basis When a bank or investment firm provides you investment advice on an independent basis, it is required to assess a sufficient range of different investment products prior to recommending you one or more products. Moreover, a number of additional rules apply to ensure that the advice you are given actually is independent. Investment advice provided on a non-independent basis A financial institution can also choose to provide investment advice on a non-independent basis. There is nothing wrong with that. It only means that your financial institution’s advice will not necessarily in- clude products provided by other financial institutions and that it may be limited to its own products. Your financial institution will have to notify you of this. In this case too, it must assess whether the product is appropriate for you. MiFID II introduces a new kind of investment service: investment advice on an independent basis. What is this?