COBS 9B.6 Disclosure

1. (1) When a firm provides a ready-made suggestion to a client, it must clearly refer to the service by which the ready-made suggestion is provided as ‘Targeted Support’.

2. (2) A firm must only refer to a service as being a targeted support service when the service is one that has been designed and delivered in compliance with the rules in this chapter.

    

COBS 9B.6.1R(1) does not prevent a firm from:

1. (1) using another name for the service it provides, provided that at the point a ready-made suggestion is provided to a client, the service is clearly described as being ‘Targeted Support’ (such that the client can identify the service as such); or

2. (2) referring to the service as ‘Targeted Support’ in communications other than when providing a ready-made suggestion.

    

When a firm provides a ready-made suggestion to a client, the firm must clearly disclose to the client:

1. (1) the common characteristics (both including characteristics and excluding characteristics) of the consumer segment with which the firm has aligned the client;
2. (2) that the ready-made suggestion was designed for the consumer segment with which the firm has aligned the client; and

3. (3) the nature of any limitations on the scope of products considered by the firm in developing its ready-made suggestions including, where applicable, that the firm has only considered products issued or provided by the firm or its associates.

    

At the same time as a firm providing targeted support makes a recommendation to a client, the firm must make a statement to that client which specifies:

1. (1) that the recommendation is not based on a comprehensive consideration by the firm of the client’s characteristics or circumstances;
2. (2) that the recommendation is not specific to the client; and
3. (3) the characteristics, circumstances, or both if applicable, of the group which the firm has used as the basis for the recommendation.

4. [Note: article 55A(4) and (5) of the Regulated Activities Order]

    

In connection with providing a client with a ready-made suggestion, a firm should, where appropriate:

1. (1) signpost the client to tools or modellers that could assist the client in understanding the implications of the ready-made suggestion;
2. (2) inform the client about the availability of guidance services (such as MoneyHelper) and other types of advice, including more comprehensive, individualised advice;
3. (3) to support consumer understanding, inform the client about any assumptions that the firm has made about the individuals in the consumer segment;
4. (4) consider encouraging the client to consider other products which might be available in the market before making a decision; and

5. (5) consider explaining to the client that the firm only considers the ready-made suggestion to be suitable for the individuals in the consumer segment at the point in time it has been suggested, where this is the case.

    

1. (1) Firms are reminded of their obligations under Principle 12 (Consumer Duty) and PRIN 2A.5.3R (Communications to retail customers) in relation to supporting retail customer understanding.
2. (2) PRIN 2A.5.3R requires a firm to equip retail customers to make decisions that are effective, timely and properly informed.
3. (3) In complying with PRIN 2A.5.3R, a firm should consider:
   1. (a) whether to disclose any other relevant information (beyond that required by COBS 9B.6.3R and COBS 9B.6.5R) that would support consumer understanding of the targeted support service or a ready-made suggestion; and

   2. (b) whether to disclose information separately or to consolidate information.

       

1. (1) PRIN 2A.5.5R requires a firm to communicate in good time for retail customers to make effective decisions, including before the purchase of a product.
2. (2) In complying with PRIN 2A.5.5R, a firm should consider when it is appropriate to make disclosures to a client in connection with the provision of a targeted support service. It is likely to be appropriate to disclose relevant information to a client:
   1. (a) when the firm has initial contact with the client in relation to the provision of a targeted support service;
   2. (b) where applicable, at any point at which the firm contacts the client to request, or verify the accuracy of, information for the purpose of aligning the client with a consumer segment; and
   3. (c) where applicable, when the firm provides the client with a ready-made suggestion.

3. (3) The information in COBS 9B.6.5R and COBS 9B.6.6G must necessarily be disclosed to the client when a ready-made suggestion is provided.

    

1. (1) This rule applies where another rule in this sourcebook (the ‘relevant rule’) requires a firm to provide information to a client about a targeted support service at a time that is incompatible with the nature of that targeted support service.

2. (2) A firm must provide the information required by the relevant rule at a time that is consistent with PRIN 2A.5.5R.

    

1. (1) Firms are reminded of their obligations under COBS 6.1 (Information about the firm and compensation information (non-MiFID and non-insurance distribution provisions)) and COBS 6.1ZA (Information about the firm and compensation information (MiFID and insurance distribution provisions)).
2. (2) To the extent applicable, firms are reminded of their obligations under COBS 2.2 (Information disclosure before providing services (other than MiFID and insurance distribution)) and under COBS 2.2A (Information disclosure before providing services (MiFID and insurance distribution provisions)).
3. (3) If a ready-made suggestion involves a recommendation of a particular investment, a firm may be subject to requirements in:
   1. (a) COBS 13 and COBS 14 relating to product information; and
   2. (b) for consumer composite investments, a requirement under DISC to provide retail investors with a product summary.
4. (4) When providing information to a client, a firm should have regard to its obligation under PRIN 2A.5.3R(2) and COBS 4.2.1R to communicate information to clients in a way which is fair, clear and not misleading. 

5. (5) COBS 9B.6.13R recognises that targeted support services may be provided differently to other types of service and that it may not, for example, be possible to provide information about the service ‘in good time’ before the service is provided. That rule allows information about a targeted support service to be provided at a time that is consistent with the way in which the service is provided in compliance with PRIN 2A.5.5R.

    

1. (1) A ready-made suggestion will generally incorporate a financial promotion.

2. (2) Firms are reminded of their obligations under COBS 4 in relation to the communication and approval of financial promotions, including the fair, clear and not misleading rule.

    

1. (1) It is important that clients understand the nature of the support they are receiving. It is particularly important that clients who have recently received, or are receiving, investment advice (as defined in the Handbook) understand the ways in which a targeted support service differs from that service.
2. (2) Firms are reminded of their obligation to support retail customer understanding so that firms’ communications equip retail customers to make decisions that are effective, timely and properly informed (PRIN 2A.5.3R).
3. (3) Firms should pay particular regard to the information needs of any client:
   1. (a) to whom the firm:
      1. (i)  has recently provided investment advice; or
      2. (ii) is providing investment advice of an ongoing nature; or
   2. (b) whom the firm is aware, or ought reasonably to be aware, is receiving, or has recently received, investment advice from another person.

4. (4) Before providing a ready-made suggestion to a client in (3), a firm should take reasonable steps to ensure that the client understands the difference between a targeted support service and the investment advice already received by the client.

    

1. (1) Unless (2) or (3) apply, a firm must provide the information in COBS 9B.6.3R and COBS 9B.6.5R to a client in a durable medium when it provides the client with a ready-made suggestion.
2. (2) In relation to the information in COBS 9B.6.3R, paragraph (1) applies unless the firm has provided that information in a durable medium within a reasonable period prior to the provision of the ready-made suggestion.

3. (3) Where it is not possible for a firm to provide the information in (1) in a durable medium when it provides the client with a ready-made suggestion, the firm must provide that information to the client in a durable medium as soon as reasonably practicable after it provides the ready-made suggestion.