How you need to change your sales presentations under MiFID II

Presentation-01You may be aware that MiFID II – The Markets in Financial Instruments Directive II – will come into effect on 3 January 2018.

You might be aware that it will bring a number of changes around the creation and distribution of financial products.

But do you know how it will impact your sales presentations?

Here we look at how presentations will need to change to be compliant under the new directive. 

What is changing under MiFID II?

The new directive includes new and enhanced requirements.

Many of these relate to operations – but some have a direct impact on sales and promotional activity.

You can read more about the directive and its requirements in our blog, What is MiFID II and what do you need to do to comply.

Sales and MiFID II – what’s the impact?

For business developers, one of the main areas of interest will be the change to professional client communications.

From 3 January 2018, all communications to professional clients will be treated as financial promotions.

This means that any presentation to an existing client – for example, introducing them to a new product or service line – will be a financial promotion.

So it will need to meet the FCA’s requirements for FPs. And it will need to be approved by an authorised Compliance Officer.

What are the rules on financial promotions?

The FCA’s rules around financial promotions are much stricter than those around existing customer communications.  Our blog, What is a financial promotion? has more detail on what constitutes an FP and what regulatory requirements they need to meet.

What does this mean for sales presentations?

We’ve identified 5 key areas where your proposals, pitch documents and presentations to professional clients will need to change.

  1. Risk warnings. These will need to be included. Some firms may create a number of compliant risk wordings at corporate or business unit level. Find out if this is the case in your organisation – and make sure you use the right one.

  2. Importantly, risk warnings need to be the same size as the main body text. ‘Small print’ no longer exists. Read more here on the FCA’s prominence rules.

  3. All footnotes and disclaimers will need to be changed. All too often, choosing the right disclosure or disclaimer can be a bit of a lottery. This won’t be good enough under the new rules.

  4. Performance data will need to be up to date and in the correct format for the target audience. There are different rules for retail and professional audiences – you need to understand what these are and how they impact your content.

  5. Approvals – all your presentations to professional clients will need sign off from your Compliance team. You’ll need to factor this into your timescales when preparing for pitches or client meetings.

What should you be doing now?

  1. Get approval. If you’re working on content for professional clients that will be used after 3 January – this needs compliance sign off.
    You need to understand what will be approved and rejected. Read our tips on how to write content your Compliance team will approve and talk to your  Compliance colleagues to get a feel for what they can sign off.

  1. Get up to speed on the rules around financial promotions. Read up on the impact of MiFID II on financial promotions to get the full picture on what’s changing.

  1. Ensure performance data is accurate. For professional clients, you will need to show future performance in good and bad market conditions.
    Work out where you will get this data from – and how you will make sure it stays current.

  2. Consider the impact on lead times. Your deadlines - in terms of client meetings and pitches - are often set in stone.
    The new requirements will put significant pressure on Compliance teams, who expect a significant increase in workload to cope with the higher volume of  promotions. You need to explore ways to improve efficiency, so you can still meet your deadlines. 
  1. Investigate potential solutions. Automation tools can help deliver the efficiency gains you need, as well as building in Compliance approval – making sure no regulatory breaches slip through the net.

Online slide libraries can also help. These searchable libraries of presentations, slides, videos and images enable compliant content to be ‘locked down’. Pre-approved templates can take care of risk wordings (content and size), correctly-formatted charts and accurate disclaimers.

Performance data can be automatically updated across all relevant slides – saving you considerable time compared to manually updating them.

When corporate information, employee numbers or AuM is updated, accurate data is ‘pulled through’ into all slides in a presentation, preventing outdated content slipping through the net. Expiry dates ensure that all data is updated when needed.

MiFID II means significant changes to business development processes.

If you want to stay compliant in the post-January world, you need to get up to speed with the new rules and put in place the changes needed to comply.

Our Guide to MiFID II covers everything you need to know about the Markets in Financial Instruments Directive. The guide is free, and you can get your copy here.

If you want to improve your sales presentations, we can help you. Read more about our Sales Solutions or contact info@perivan.co.uk if you’d like to discuss your requirements in more detail.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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