What is MiFID ll, and what does this mean for Investors?

Over the coming weeks, investors across the UK will receive be contacted by the companies who manage their money. This new European directive came into force on 3rd January 2018 and is designed to improve the functioning of financial markets following the financial crisis from 10 years ago and to strengthen investor protection.


MiFID II is largely focused on transparency of charges, protecting the investor and putting the investor’s best interests first. In plain English that means everyone has to be clearer about their charges and explain them in a consistent and understandable way. Overall we welcome this approach.


Financial advisers will be required to detail how their advice will meet their clients’ objectives and will need to explain clearly whether it is based on broad or restricted approach. We will also see the introduction of the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation which is designed to help investors to have a better understanding of the products recommended. This document will compare the features, risks attached and potential rewards as well as administration costs, using a consumer-friendly Key Information Document . This mean that the product providers and investment groups will be enhancing their client facing literature that the financial advisers have a responsibility for distributing to you.


One of the consequences of the new regulation, will lead to more frequent reporting from the investment providers on a quarterly basis about the performance of investments. This could lead to confusion as well as “short term” thinking about investments which are designed for the long term. Another consequence is that your financial adviser will have to make sure that the original recommendations is still suitable to your circumstances on an annual basis.


At Richmond House, we already base our services around ongoing relationships with our clients. We are proud to be asked to take on the important responsibility of helping individuals and their families to make sure that their financial objectives are met when they most need them.


If you would like to find out more, please contact us.


Nigel Taylor

Cert PFS, Dip FA

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. It does not constitute legal or tax advice and must not be treated as such. Richmond House Wealth Management does not offer legal advice.