Compliance Requirements for Financial Advisors in Switzerland Tightened
Financial advisors operating in Switzerland must adhere to a set of strict regulations outlined by the Swiss Financial Market Supervisory Authority (FINMA) and the Financial Services Act (FinSA). Despite not requiring authorization from FINMA, investment advisors must still comply with certain obligations under the FinSA.
Investment Advisers Subject to Regulatory Requirements
Investment advice provided in or from Switzerland is considered a financial service under the FinSA. As such, financial service providers, including investment advisers, are subject to specific duties and obligations.
Client Segmentation and Registration
Financial service providers must categorize their clients into one of three segments: retail clients, professional clients, or institutional clients. Client advisers providing investment advice services in Switzerland must register with a client adviser register, unless they work for prudentially supervised foreign financial service providers exclusively serving professional or institutional clients.
Duty to Have Sufficient Knowledge and Training
Regardless of registration requirements, client advisers must possess sufficient knowledge of the conduct rules outlined in the FinSA and have the necessary expertise to perform their duties.
Code of Conduct and Organisational Measures
Investment advisers must comply with specific code of conduct duties and organisational measures depending on the type of clients they serve. These requirements include:
- Providing information on financial instruments, including costs and potential risks
- Assessing the appropriateness and suitability of financial products for client portfolios
- Ensuring good faith and equal treatment when handling client orders
- Implementing internal rules and training employees to prevent conflicts of interest
Consequences of Non-Compliance
Failure to comply with these requirements can result in fines being imposed. It is essential for investment advisers operating in Switzerland to understand their obligations under the FinSA.
Contact Information
If you have any questions regarding the duties of investment advisers in Switzerland, please do not hesitate to contact Judith Raijmakers or Sandra Zysset at [insert contact information].