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How Will MiFID II affect Coutts clients?

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Summary

We are simplifying our services to meet upcoming regulation

3 min read

MiFID II is new regulation which aims to improve how markets function and firm up investor protection. Here’s our Q&A guide and video on what is going to change.

How will MiFID II affect clients?

MiFID II is designed to ensure greater protection and transparency across the investment management industry. It comes into effect from 3 January next year.

For Coutts clients it will mean simpler, clearer fees and greater visibility of charges when it comes to our investment services. It also means less paperwork and more straightforward documentation.

We are well prepared for the changes and there is a lot of work happening behind the scenes which, while important, won’t directly affect clients.

But there are three main areas where they will notice a difference – our fees for the investment services we provide, our terms and conditions and the need to confirm we have the most up-to-date information about them on file.

“For Coutts clients it will mean simpler, clearer fees and greater visibility of charges when it comes to our investment services.”
Video player requires JavaScript enabled. You can watch this video here: https://www.youtube.com/watch?v=bhBvGwFpUn8

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How does MiFID II affect our services and fees?

At Coutts we want to charge fees in a way that is even more transparent and easier for clients to understand. To achieve that, we are introducing an Investment Platform Service.

This new service brings together areas such as custody, valuations and tax reporting – all the basic administration that clients need when they invest. It will be charged in the same way whether an investment is self-directed, advised or in a discretionary portfolio.

In the past we’ve included that cost as part of our portfolio management fees; from January it will be separated out to give clients greater clarity on how much they are paying for these services.

Making this change has led us to review our fees for portfolio management to ensure they remain fair, consistent and competitive. The details of those changes will be sent to clients in November.

 

What changes are we making to our terms and conditions?

The regulations require us to rewrite our terms and conditions, but we have gone further and taken the opportunity to simplify them as well.

We have made them shorter and easier to understand by bringing them together in a single booklet. This booklet will contain a main set of terms and conditions covering all the most common information needed by our clients, followed by specific sections relevant to each of our services.

It will be sent to clients in November along with information on the revised fees.

 

What information will the regulator require about clients?

Currently, when we trade in investments on behalf of our clients we have to report the trades to the regulator.

From January, as well as reporting what we’ve traded, we will also have to report the identity of the decision-maker and the beneficial owner of the assets. This information is key for the regulator in trying to stamp out market abuse.

This means we need to ensure that the data we hold about our clients is up to date, accurate and in line with the new regulations.

We wrote to clients about this in September and it is vital they take the time to respond if they haven’t already. In certain circumstances, it is possible that we won’t be able to trade for clients from January if the data we have on them isn’t accurate.

If you are a Coutts client and would like more information or have any questions, please contact your Coutts adviser.

Key Takeaways

MiFID II involves three key changes at Coutts: a revised fee tariff and greater clarity on charges; simplified terms and conditions that are easier to understand; and the need to accurately report the identity of clients we trade investments for.

About Coutts investments

With unstinting focus on client objectives and capital preservation, Coutts Investments provide high-touch investment expertise that centres on diversified solutions and a service-led approach to portfolio management. Our investment process is as disciplined as it is creative – ensuring tailored solutions with robust results.

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