News

SFMA issues guidance on product risks in individual portfolio management

SFMA has published guidance on recurring risk patterns linked to products used in individual portfolio management escalation cases.

SFMA has issued new guidance explaining the risk patterns it is increasingly seeing when products are used in individual portfolio management. The guidance reminds institutions of the rules that apply when they use products in this setting.

The number of cases involving portfolio managers under Article 17 FinIA that were escalated to SFMA because of deficiencies rose over the past year. Some of these cases led to significant losses for clients and also required substantial supervisory resources.

SFMA's analysis identified recurring risk patterns. The guidance therefore emphasises early risk identification, robust governance and consistent, client-focused application of conduct rules by supervised institutions.

Institutions using products in individual portfolio management should ensure that their processes identify risks before they crystallise, that governance responsibilities are clear and that client interests remain central throughout the advisory and management process.