Better Appropriateness and Suitability Checks for Better Advisory
The PRI (Product Risk Indicator) by SIX enables wealth managers and client advisors to compare the risks of investments across different asset classes, choose and recommend risks suitable to their clients' investments and explain the risks in an intuitive and easily understandable manner.
Derived from the SRI (Summary Risk Indicator) methodology and adapted for non PRIIP asset classes, it allows a comparison of instrument risks across whole portfolios and all asset classes.
How You Will Benefit
The PRI can be directly compared to an SRI on a PRIIP‑KID relevant financial instrument. Avoid two indicators which will lead to confusion for SRI relevant instruments.
No additional risk indicator is needed for instruments carrying an issuer‑calculated SRI. The SRI can be used for instruments which already exist.
The PRI data set is available through the same channels our clients already use for regulatory services.
Enrich Your Suitability Toolbox with a Universal Risk Indicator
Several recent regulations have made it crucial for the advisory business to match the risk of an asset with the client’s ability and need to take it. Therefore, the issuer‑calculated Summary Risk Indicator (SRI) is now mandatory for structured products and derivatives, whilst for UCITS funds, a Synthetic Risk and Reward Indicator (SRRI) currently exists (expected to be migrated to an SRI by 2022). But what about the other asset classes (bonds, equities...)?
SIX decided to build a universal indicator that is comparable to the SRI: the PRI, a risk “rating” representing the risk of not PRIIP-KID relevant security. Each PRI has a value between 1 (lowest risk) and 7 (highest risk) and is derived from a market risk and a credit risk measure.
Product Suitability in the Investment Process
With new regulations and reporting rules, investors face an increase in administrative work, which might come as a burden, but it doesn’t have to be. Watch our webinar to find out how SIX can help wealth managers and client advisors monitor the suitability and appropriateness of investment products in order to match them to the risk profile of their clients.