Date: 12.07.2022Question 1: Anyone providing portfolio management services may only recommend a suitable type of asset management to their customers. How is the suitability of the portfolio management determined?
Answer: In accordance with section 64 (3) of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) and Articles 54 and 55 of Delegated Regulation (EU) 2017/565, the suitability of the portfolio management is determined based on whether or not the investment strategy recommended to the client, and the investment risks that arise from that strategy, match the client's investment objectives. In addition, the recommended strategy must take into account the client's ability to bear losses based on their investment objectives. Furthermore, of particular importance is whether or not the clients, based on their knowledge and experience, can understand the investment risks inherent in the recommended portfolio management approach.
