Focus on customer interests
Put the client’s interests first. Conduct careful research into your client’s financial situation and goals and provide advice that is in their best interest. This also means not always going along with the client’s wishes. Inform your client fully and honestly about costs and outcomes, and act transparently and carefully every step of the way.
DSI core principles in practice
What can you learn from this DSI-2013-04 ruling by the DSI Disciplinary Committee?
On May 1, 2013, the DSI Disciplinary Committee ruled in a case against a DSI-certified investment adviser working at a bank. This case focused on acting contrary to the interests of the client.
DSI’s investigation revealed that the investment adviser had put his client in contact with a party that was not licensed to provide investment services. The client liquidated his investment portfolio at the bank and transferred €620,000 to the account of this institution. For this, the advisor received a fee from the party in question.
During the period in which this party managed the client assets, the adviser remained involved. He maintained contact with the client, provided information about the investments, and allowed money to flow through his own bank account: payments from the institution to the client went through him. When it became clear that management was not going well and significant losses were being incurred, the advisor did not intervene. In the end, the client received back only €250,000 of his original deposit.
The Disciplinary Committee concluded that the investment adviser had allowed other interests to override those of his client. He did not understand the investments or the associated risks, did not take action when things went wrong, and did not act with sufficient care. In doing so, he abused the trust the client placed in him. The measure: expulsion.
A customer’s trust is valuable and fragile. Make sure you always live up to that trust
What does this mean to you?
This statement demonstrates the importance of truly focusing on customer interest. Focus on customer interests means always acting in the best interests of your customer, even if that means saying “no” to a request or offer. Transparency, diligence and avoiding conflicting interests are crucial here.
What can you take away from this?
- Work only with parties that are supervised and properly licensed.
- Never let your own or external interests outweigh the client’s interest.
- Engage with the client if you see that an investment is not going well.
By really putting your client’s interests first, you show that you are reliable and professional. Exactly what the sector needs.
DSI Core Principles
At DSI, ten core principles are central to the essence of our Code of Conduct. They offer financial professionals guidance on how to act with integrity on a daily basis and strengthen trust in the sector. Every DSI certified professional commits to these principles so that together we contribute to a transparent and honest financial sector.
