Warning: This document is simply a guideline template designed to assist Financial Brokers in producing Statements of Suitability that should be tailored to the individual investment requirements and investment objectives of each individual client/investor. While this draft document provides the Key Features of the product concerned and suggests the Target Market to which the product could be considered suitable, Financial Brokers should consider and insert the individual circumstances of each client/investor when tailoring their Statement of Suitability finally presented to each client/investor.
Warning: Each Statement of Suitability should be tailored to the individual circumstances, needs and objectives of each client/investor. The Financial Broker is responsible in full for the content of the Statement of Suitability presented to the client/investor.
The information in yellow throughout this document should be inserted by the Financial Broker.
The information in green throughout this document is optional and should be inserted by the Financial Broker as required.
Sample Statement of Suitability – Broker Solutions Guaranteed Income Bond 2
Important Notice – Statement of Suitability[or Advice]
This is an important document which sets out the reasons the product(s) or service(s) [advice] offered or recommended is/are considered suitable, or the most suitable, for your particular needs, objectives and circumstances.
Scope of the Statement of Suitability
The purpose of this document is to outline the reasons why the Broker Solutions Guaranteed Income Bond2is the most suitable product for you.
Your Investment Needs and Objectives
During our discussions, you outlined your investment needs and objectives as follows:
Investment needs and objectives should be inserted here. For example:
- Primary Investment Objectives e.g. capital growth and/or income, level of Capital Protection etc.
- Attitude to Risk/Risk Profile (in particular, where relevant, the importance of Capital Security to the client/investor)
- Investment Term
- Any Need for Access to Funds
- Need to Accumulate Funds
- Any other relevant Needs or Objectives, Likes or Dislikes
The Financial Broker may also wish to reconfirm the Personal Circumstances of the client/investor. For example:
- Name
- Age
- Health
- Knowledge and Experience of financial products
- Dependents
- Employment Status
- Known future changes to his/her circumstances
The Financial Broker may also wish to reconfirm the Financial Situation of the client/investor. For example:
- Income
- Savings
- Pension Planning
- Current financial products owned and other assets
- Debts and financial commitments
Our Recommendation
We believe that the Broker Solutions Guaranteed Income Bond 2is consistent with your investment objectives and risk profile. Furthermore, having conducted research of the various investment products that are consistent with your objectives and risk profile, we have concluded that the Broker Solutions Guaranteed Income Bond 2is the most suitable available.
If the Financial Broker provided an oral explanation of the product during his/her discussions with the client/investor, the Financial Broker should record the details of such an explanation here.
Broker Solutions (the provider of the Bond) has targeted the Bond at investors who:
- Have received advice from a Financial Broker and for whom this Bond is appropriate and suitable.
- Have prior knowledge of investing in complex investments with capital at risk or have been advised by a Financial Broker regarding the risks and rewards of this type of Bond.
- Are able to bear loss of some or all of the capital invested.
- Are able to invest for the chosen term of 5 years.
- Expect the Underlying Investments to achieve moderately negative to moderately positive returns during the tem.
- Have a risk appetite consistent with the product risk score of 3.
- Can invest a minimum of €25,000.
- Understand that inflation will erode the future value of the amount invested and the fixed investment return.
- Understand that the return of the initial investment amount is dependent on the creditworthiness of BNP Paribas and on the performance of the Underlying Investments.
- Understand that the payment of the fixed investment return is dependent on the creditworthiness of BNP Paribas.
- Understand that the opportunity cost of an investment in this Bond is the interest foregone as a result of not placing the investment amount in an interest bearing deposit account.
We believe your investment objectives and risk profile are consistent with the Target Market identified by the Bond provider.
How the Broker Solutions Guaranteed Income Bond 2 is aligned to your Attitude to Risk
The Broker Solutions Guaranteed IncomeBond 2has a Risk Score of 3. This is consistent with your risk profile and attitude to investment risk.
The Broker Solutions Guaranteed Income Bond 2 has a Soft Capital Protection feature as follows:
Investors will receive back their initial capital if none of the 3 Indices has fallen by -40% or more on the Final Valuation Date. If any of the 3 Indices have fallen by -40% or more on the Final Valuation Date, investors will receive the performance of the worst performing Index no matter how much it has fallen.
Summary of the Key Features of the Broker Solutions Guaranteed Income Bond 2
- The Guaranteed Income Bond 2 (the Bond) is an innovative new Investment Solution designed for investors seeking an elevated level of Fixed Investment Income and investors seeking a risk reducing mechanism to provide a degree of protection from normal stock market risk. The Bond is suitable as part of the process of constructing a genuinely diversified investment portfolio.
- The Underlying Investments of the of the Bond are:
EuroStoxx 50 Index / S&P 500 Index / FTSE 100 Index
- Investors in the Bond have their Capital at Risk. This means that you may lose some or all of the capital invested in this Bond. Broker Solutions considers the Bond to have a risk score of 3 (Cautious) on its risk scale.
- The Bond pays a Guaranteed Income of 3% each year, regardless to the performance of the Underlying Investments.
- Soft Capital Protection: Investors will receive back their initial investment in the event that none of the 3 Indices have fallen by -40% or more at the Final Valuation Date. If any of the 3 Indices has fallen by -40% or more at the Final Valuation Date, investors will receive the performance of the worst performing Index, no matter how much it has fallen.
- The Bond has a 5 year term.
- The Minimum Investment Return is 15%.
- The Maximum Investment Return is 15%.
- The Bond will be listed on the Luxembourg Stock Exchange.
- Daily liquidity will be provided to investors that wish to sell the Bond prior to maturity under normal market conditions and at the discretion of BNP Paribas Arbitrage SNC.
- The Minimum Investment in the Bond is €25,000.
- The Closing Date for applications is 24 May 2017.
- Taxation: Our understanding is that the returns will be subject to Income Tax in the case of Personal Investors and exempt from taxation in the case of Pension and Post Retirement Investors.
Warning: If you invest in this Bond you may lose some or all of the money you invest.
Warning: The value of your investment may go down as well as up.
Please review the Bond Brochure in full where the all features of this Bond are outlined and a full list of risk warnings are provided before completing and signing the Bond Application Forms.