View presentation used by Alberto Romagosa (only for members)
View presentation used by Carles Tusquets (only for members)


Under the auspices of the ESADE Alumni’s Finance Club, Alberto Romagosa, President of the Association of Investment Advisers (AIF) and Chief Executive of SeBroker Bolsa-Agencia de Valores, and Carlos Tusquets, President of EFPA España and Fibanc-Mediolanum, explained the details of the independent financial adviser model.

This model has already been used in the United States and in other European countries for numerous years. It is just beginning to be implemented in Spain, especially as a result of the legal establishment of the professional category of independent financial adviser entities (EAFI in Spanish). With this law as the backdrop, Carlos Bach (Combined Undergraduate & Master in Management, 1993), a member on the ESADE Alumni Finance Club's Board of Directors, began the conference by underscoring that “in times of crisis, episodes like the Bernard Maddoff case have not contributed to create a sense of trust in the financial adviser".

This served to introduce Alberto Romagosa’s analysis of financial assessment in Spain and in the rest of the world. In his view, we are facing a pre-existing reality with vast differences among European Union member countries, with a lack of specific regulations in Spain, thus allowing for the completely free exercise of the profession though leaving the investor unprotected. Given this situation, the aim of the Markets in Financial Instruments Directive (MiFID) is to “standardise markets, regulations, the profession and the complexity of values", he added. 

At the same time, the personalised recommendations made to clients is also regulated, differentiating between specific assessment (including individualised recommendations and to a concrete investor) and generic assessment (general recommendations). At the same time, three types of clients are identified: the retail client (to whom the directive is especially aimed at) and the professional and eligible counterparty clients.

At this point, Romagosa referred to the obligatory procedures established within said law, based on suitability tests (a personal analysis of the client for the service or product offered to adapt to the client’s profile) and convenience tests (a personal analysis of the client to see if the product he/she requests, depending on his/her experience and situation, is adequate).

That notwithstanding, these specifications contrast with the current reality which, according to Alberto Romagosa, “clients are not very informed, and advisers have little training, while independence conflicts with the remuneration system, and there is a lack of support for the open structure".

Clients’ needs are key

Based on these reflections, Carlos Tusquets pointed out, firstly, that the MiFID introduced the regulation of financial assessment services which, though it already existed, “it did not have a license". He added that “it insists on the point that assessment should always be based on the client’s needs, favouring these over the entity’s needs".

Upon this basis, the President of EFPA España aimed to define what is understood as assessment, a function for which it is absolutely necessary “to listen carefully to what the client wants and be familiar with his/her needs over the short, mid and long terms". In this respect, he indicated that these needs vary over time, making it necessary to provide “dynamic, never static assessment".

Positioning himself on the side of the savers, he reflected on a basic fact within his presentation: “People buy when the stock market is dropping while they sell faster when it’s up". As such, he wondered: “Have we been advising our clients correctly over these last few months?" He answered his own question in the negative, emphasising that we are facing a scenario of market savings due to the drop in regulated rates.

Continuing with his analysis of the current situation, Carlos Tusquets attempted to address the weight of pension funds in total Spanish GDP, currently representing 8.1% compared to the figure in Holland where pension funds represent 155% of the country’s gross domestic product.

Based on the assumption that “we’re faced with a serious problem,¿ he ended his presentation with a clear message regarding the MiFID: “There are still a lot of things that have to be fixed in this law which focuses more on products than on people". And that, according to Tusquets, “makes it fundamental for you to always explain to the client what it is your proposing as a financial adviser".

For further information:
clubfinanzas@alumni.esade.edu

View presentation used by Alberto Romagosa (only for members)
View presentation used by Carles Tusquets (only for members)


Under the auspices of the ESADE Alumni’s Finance Club, Alberto Romagosa, President of the Association of Investment Advisers (AIF) and Chief Executive of SeBroker Bolsa-Agencia de Valores, and Carlos Tusquets, President of EFPA España and Fibanc-Mediolanum, explained the details of the independent financial adviser model.

This model has already been used in the United States and in other European countries for numerous years. It is just beginning to be implemented in Spain, especially as a result of the legal establishment of the professional category of independent financial adviser entities (EAFI in Spanish). With this law as the backdrop, Carlos Bach (Combined Undergraduate & Master in Management, 1993), a member on the ESADE Alumni Finance Club's Board of Directors, began the conference by underscoring that “in times of crisis, episodes like the Bernard Maddoff case have not contributed to create a sense of trust in the financial adviser".

This served to introduce Alberto Romagosa’s analysis of financial assessment in Spain and in the rest of the world. In his view, we are facing a pre-existing reality with vast differences among European Union member countries, with a lack of specific regulations in Spain, thus allowing for the completely free exercise of the profession though leaving the investor unprotected. Given this situation, the aim of the Markets in Financial Instruments Directive (MiFID) is to “standardise markets, regulations, the profession and the complexity of values", he added. 

At the same time, the personalised recommendations made to clients is also regulated, differentiating between specific assessment (including individualised recommendations and to a concrete investor) and generic assessment (general recommendations). At the same time, three types of clients are identified: the retail client (to whom the directive is especially aimed at) and the professional and eligible counterparty clients.

At this point, Romagosa referred to the obligatory procedures established within said law, based on suitability tests (a personal analysis of the client for the service or product offered to adapt to the client’s profile) and convenience tests (a personal analysis of the client to see if the product he/she requests, depending on his/her experience and situation, is adequate).

That notwithstanding, these specifications contrast with the current reality which, according to Alberto Romagosa, “clients are not very informed, and advisers have little training, while independence conflicts with the remuneration system, and there is a lack of support for the open structure".

Clients’ needs are key

Based on these reflections, Carlos Tusquets pointed out, firstly, that the MiFID introduced the regulation of financial assessment services which, though it already existed, “it did not have a license". He added that “it insists on the point that assessment should always be based on the client’s needs, favouring these over the entity’s needs".

Upon this basis, the President of EFPA España aimed to define what is understood as assessment, a function for which it is absolutely necessary “to listen carefully to what the client wants and be familiar with his/her needs over the short, mid and long terms". In this respect, he indicated that these needs vary over time, making it necessary to provide “dynamic, never static assessment".

Positioning himself on the side of the savers, he reflected on a basic fact within his presentation: “People buy when the stock market is dropping while they sell faster when it’s up". As such, he wondered: “Have we been advising our clients correctly over these last few months?" He answered his own question in the negative, emphasising that we are facing a scenario of market savings due to the drop in regulated rates.

Continuing with his analysis of the current situation, Carlos Tusquets attempted to address the weight of pension funds in total Spanish GDP, currently representing 8.1% compared to the figure in Holland where pension funds represent 155% of the country’s gross domestic product.

Based on the assumption that “we’re faced with a serious problem,¿ he ended his presentation with a clear message regarding the MiFID: “There are still a lot of things that have to be fixed in this law which focuses more on products than on people". And that, according to Tusquets, “makes it fundamental for you to always explain to the client what it is your proposing as a financial adviser".

For further information:
clubfinanzas@alumni.esade.edu

View presentation used by Alberto Romagosa (only for members)
View presentation used by Carles Tusquets (only for members)


Under the auspices of the ESADE Alumni’s Finance Club, Alberto Romagosa, President of the Association of Investment Advisers (AIF) and Chief Executive of SeBroker Bolsa-Agencia de Valores, and Carlos Tusquets, President of EFPA España and Fibanc-Mediolanum, explained the details of the independent financial adviser model.

This model has already been used in the United States and in other European countries for numerous years. It is just beginning to be implemented in Spain, especially as a result of the legal establishment of the professional category of independent financial adviser entities (EAFI in Spanish). With this law as the backdrop, Carlos Bach (Combined Undergraduate & Master in Management, 1993), a member on the ESADE Alumni Finance Club's Board of Directors, began the conference by underscoring that “in times of crisis, episodes like the Bernard Maddoff case have not contributed to create a sense of trust in the financial adviser".

This served to introduce Alberto Romagosa’s analysis of financial assessment in Spain and in the rest of the world. In his view, we are facing a pre-existing reality with vast differences among European Union member countries, with a lack of specific regulations in Spain, thus allowing for the completely free exercise of the profession though leaving the investor unprotected. Given this situation, the aim of the Markets in Financial Instruments Directive (MiFID) is to “standardise markets, regulations, the profession and the complexity of values", he added. 

At the same time, the personalised recommendations made to clients is also regulated, differentiating between specific assessment (including individualised recommendations and to a concrete investor) and generic assessment (general recommendations). At the same time, three types of clients are identified: the retail client (to whom the directive is especially aimed at) and the professional and eligible counterparty clients.

At this point, Romagosa referred to the obligatory procedures established within said law, based on suitability tests (a personal analysis of the client for the service or product offered to adapt to the client’s profile) and convenience tests (a personal analysis of the client to see if the product he/she requests, depending on his/her experience and situation, is adequate).

That notwithstanding, these specifications contrast with the current reality which, according to Alberto Romagosa, “clients are not very informed, and advisers have little training, while independence conflicts with the remuneration system, and there is a lack of support for the open structure".

Clients’ needs are key

Based on these reflections, Carlos Tusquets pointed out, firstly, that the MiFID introduced the regulation of financial assessment services which, though it already existed, “it did not have a license". He added that “it insists on the point that assessment should always be based on the client’s needs, favouring these over the entity’s needs".

Upon this basis, the President of EFPA España aimed to define what is understood as assessment, a function for which it is absolutely necessary “to listen carefully to what the client wants and be familiar with his/her needs over the short, mid and long terms". In this respect, he indicated that these needs vary over time, making it necessary to provide “dynamic, never static assessment".

Positioning himself on the side of the savers, he reflected on a basic fact within his presentation: “People buy when the stock market is dropping while they sell faster when it’s up". As such, he wondered: “Have we been advising our clients correctly over these last few months?" He answered his own question in the negative, emphasising that we are facing a scenario of market savings due to the drop in regulated rates.

Continuing with his analysis of the current situation, Carlos Tusquets attempted to address the weight of pension funds in total Spanish GDP, currently representing 8.1% compared to the figure in Holland where pension funds represent 155% of the country’s gross domestic product.

Based on the assumption that “we’re faced with a serious problem,¿ he ended his presentation with a clear message regarding the MiFID: “There are still a lot of things that have to be fixed in this law which focuses more on products than on people". And that, according to Tusquets, “makes it fundamental for you to always explain to the client what it is your proposing as a financial adviser".

For further information:
clubfinanzas@alumni.esade.edu