“The MiFID II deadline was extended once. We do not plan on extending it again.”
– Valdis Dombrovskis, EU Commission Vice President, in charge of financial stability

MiFID II is coming then, with no further delays, despite the Investment Week report from back in April that two thirds of financial services firms were unlikely to meet the January 2018 deadline.

Whilst that might signal a winter of discontent for some there is opportunity in the apparent MiFID II mire. As with any other regulatory change, the potential exists to embrace the new world order and turn it to your advantage.

At its core, MiFID II encourages open and honest communication with clients, albeit with clear guidelines on what to tell them, when.

But… hold on a minute… isn’t this exactly what has been encouraged industry wide for some time now? Particularly by progressive IFAs who see the positives in approaches such as activity-based pricing and updates that are more regular than an annual meeting, for example?

Clarity of costs features heavily in the new legislation. There are two simple options for the current state of play for firms here; either clients have clarity of their costs already, or they do not. The simple truth is that if clients don’t see costs clearly now, then they will at some point. MiFID II mandates it, for one, and surely there would have come a time when a client would ask the question. Why not provide the answer now?

Taking those two facets clearly then – client communication and client charges – MiFID II is the chance for firms to highlight how great they already are, or join the leading pack. Whilst there might be some short term upheaval, the end results should be a higher trust relationship with clients, more open and honest conversations, clients happier and more knowledgeable about their financial planning… In the long run: more clients, happier, for longer.

The opportunity is there for firms who are willing and able to embrace and move forward under the new rules.

From our side, we’re taking a number of steps to help Hubwise users grow in the new MiFID II environment, including:

  • Client reporting – electronic valuation reports and statement on a quarterly basis.
  • DFM reporting for firms with discretionary permissions – automatic monitoring of client portfolios for the 10% valuation change (or multiples of) between reporting periods. Notification sent to the DFM in the case of this occurrence.
  • Know Your Customer (KYC) changes – enforced collection of KYC data, such as national insurance number and Legal Entity Identifier for certain types of clients.
  • Costs and charges – we are working with our data suppliers and custodians to ensure details of all costs will be disclosed and transparent to the underlying client.