Appropriateness assessment?

I have just received an email regarding this test I must take due to particular holdings I might have. It appears in the app too at the top of my portfolio. Although it relates to certain holdings it doesn’t tell me which ones. It all looks a bit daunting to say the least. Is it genuine and what happens if I fail the test!

Interested in this - can you post details of the message you see?

You would think an ‘Appropriateness test’ should be something all brokers need to do with new customers in advance. :man_shrugging:

I just had it too and I passed it. I think the tests are different depending on what the holding is. For example one was because of an ETC (Exchange Trade Commodity) I hold and I also did one on leverage although I don’t intend to dabble in that, at least not yet. So long as you know enough about what you want to buy, I think that’s all they’re testing.

Here is a screenshot of the bottom of the email I received. I didn’t find any message within the app, had to click buy on the stock to get it.

Yes, it’s genuine. The purpose of the test is to ensure you have the necessary knowledge and experience to deal with complex instruments. The current list of instruments includes:

  • Inversed funds
  • Leveraged funds
  • Exchange-traded commodities (ETCs)
  • Exchange-traded products (ETPs)

If you fail - you can always try again.

We’ve prepared an article in our Help Centre for you, where you may learn more. Check it out :point_down:

You may want to add some investment trusts to this list – a fair few on the platform probably should have some sort of suitability check.

As an example, the Schiehallion Fund’s own KID says it’s ‘not compatible for retail investors’ – yet anyone can buy it on T212 no questions asked.

1 Like

Do you intend to read through all KID to see which are not compatible for retail investors. The industry is pretty poor imo. All ETP/ETCs/Inversed/Leveraged funds being blanket taken as the same. Some are 1x or 1x reverse. What is wrong with them?

1 Like

No I don’t, but I think brokers should. It’s important that they don’t sell complex financial products to average-Joe retail investor without carrying out the appropriate checks.

It’s a fair point though: it’s not especially clear when a knowledge/experience check is required. Unfortunately, MiFID Article 25 and COBS 10 are as difficult to comprehend as they sound.

1 Like

People shouldn’t be too concerned with this. Its a good thing. Only a few basic questions, takes less than minute to complete.

Actually its a bit dumb. It basically comes down to “what does ETP stand for?” and “which carries more risk leverage products or normal shares?” lol.


Well, it depends? :crazy_face:

→ What is more risky, a 2x/3x Apple ETP or a Meme/Penny Stock without leverage (“normal share”)?

(Which one can go first to zero? :wink: )

DISCLAIMER: Not advocating for ETPs, shares or any other type of financial instrument.

The list is dynamic, and it’s possible that it expands down the road. We’ll keep you posted, as always.

1 Like