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Switzerland has adopted the Federal Law on Financial Services (FinSA) and its implementing ordinance (OSFin). They entered into force on 1st January 2020. The (main) deadline for their implementation is 31st December 2021.
This new legislation aims to improve investor protection.
NextGen Wealth Managers SA (hereinafter: “the Company” or “the wealth manager”) is subject to this law insofar as it carries out wealth management and advisory services for individual portfolios.
This note reflects the status as of 07.07.2022. If this document is amended, the latest version will be made available to the Company’s customers.
II. GENERAL INFORMATION REQUIREMENTS FOR THE FINANCIAL SERVICE PROVIDER
A. Contact details, scope of activity and monitoring regime
The Company is a Swiss company registered in the Commercial Register of the Canton of Geneva since 15th November 1991.
The Company has its registered office and address at Rue du Mont-de-Sion 8, 1206 Geneva.
Its contact details are as follows:
The Company offers discretionary portfolio management and advisory services for individual portfolios to Swiss and foreign clients.
Since 1st January 2020, it has been subject to the Federal Law on Financial Institutions (FinIA). As such, it has initiated the process of applying to FINMA for an “Wealth Manager” license within the meaning of Article 17 and ss LEFin.
The Company is affiliated to the Self-Regulatory Organization (SRO) of AOOS and upon approval by FINMA will be subject to the Supervisory Body (SB) pursuant to Article 43a of the Swiss Financial Market Supervision Act (LFINMA) as follows :
B. Professional secrecy
The Company is obliged to observe professional secrecy in its business relationship with the client and to treat as confidential all data, information and specific documents on the client that are received during the course of the business relationship. This obligation shall continue after termination of the contractual relationship.
C. Dormant assets
It may occur that the contact with clients is lost and assets subsequently become dormant. These assets may be permanently forgotten by clients and their heirs. The following is recommended to avoid losing contact:
D. Mediation procedure with a mediation body approved by the Federal Department of Finance
Financial service providers must be affiliated to a mediation body. Disputes between a financial service provider and a client can thus be settled by mediation, which does not exclude the possibility of legal proceedings. The mediation procedure is fair, fast, impartial and inexpensive for the customer, or even free of charge.
The Company is affiliated with the following ombudsman body:
III. INFORMATION ON GENERAL RISKS RELATED TO FINANCIAL SERVICES AND INSTRUMENTS
A. Discretionary wealth management risks
a. In general
The Company offers discretionary wealth management services. In this context, the client entrusts the Company with assets and gives it a mandate to invest them on his behalf in financial instruments.
The wealth manager manages the assets that the client has deposited with a custodian bank in the name of, on behalf of and at the risk of the client. The wealth manager ensures that the transactions he carries out correspond to the client’s profile and the agreed investment strategy and that the structuring of the portfolio is appropriate. Investment decisions are made entirely by the Company (without prior consultation with the client).
Such an wealth management activity involves transactions in financial instruments which are associated with opportunities and risks of varying degrees depending on the investment strategy agreed with the client. It is therefore important that the client understands these risks before using this financial service and defining an investment strategy.
Within the framework of asset management, the asset manager carefully selects the investments to be included in the portfolio within the framework of the market offer under consideration. The wealth manager ensures an appropriate spread of risks, insofar as the investment strategy allows.
The wealth manager regularly informs the client about the agreed and provided wealth management.
In the context of wealth management, there are, in principle, risks that fall within the client’s risk sphere and are therefore borne by the client:
In addition, asset management involves risks which fall within the risk sphere of the wealth manager and for which the latter is liable to the client. The wealth manager has taken appropriate measures to counter these risks, in particular by observing the principle of good faith and the principle of equal treatment when handling client orders. Furthermore, the wealth manager ensures the best possible execution of client orders.
B. Risks related to the advisory services for individual portfolios
a. In general
Within the framework of an investment advisory mandate, the Company advises the client on transactions in financial instruments, taking into account its portfolio. To this end, the Company ensures that the recommended transaction corresponds to the investment objectives (suitability test) or the investment strategy agreed with the client. The client then decides for himself to what extent he wishes to follow the Company’s recommendation.
Investment advice is provided on a regular basis, either on the client’s initiative or on the Company’s initiative. In doing so, the Company shall advise the client to the best of its knowledge and with due diligence.
The Company shall regularly check whether the structuring of the portfolio for investment advice corresponds to the agreed investment strategy. If it is found that there is a deviation from the agreed structuring, the Company will recommend corrective action to the client.
The firm will keep a record of each advice.
In addition to the risks mentioned above in the context of wealth management, there are in principle additional risks in the case of an advisory mandate which fall within the client’s risk sphere and are therefore borne by the client:
In addition, investment advice on the portfolio entails risks which fall within the Company’s risk sphere and for which the Company is responsible to the client. The Company has taken appropriate measures to counter these risks, in particular by respecting the principle of good faith and the principle of equal treatment when handling client orders. In addition, the Company ensures the best possible execution of client orders.
C. The market offer taken into consideration
The market offer taken into account in the selection of financial instruments covers third-party financial instruments as well as financial products (in particular structured products, certificates and collective investment funds) for which the Company assumes specific tasks (structuring, advisory, management or any other function related to the said investment vehicle). The Company receives remuneration for the tasks it performs from the financial products that would be included in the market offer. The client is aware of the risk of conflicts of interest arising from this (see section E below).
D. Risks associated with financial instruments
Transactions in financial instruments are associated with opportunities and risks. The specific risks inherent in the financial instruments offered are described in the SBA’s brochure “Risks of Trading in Financial Instruments” (see Appendix 1). We invite clients to read this brochure carefully and remain at your disposal to answer any questions.
E. Managing conflicts of interest
a. In general
Conflicts of interest may arise if the Company :
Conflicts of interest may arise in connection with the financial services provided by the Company. They arise in particular from the coincidence of:
In order to identify conflicts of interest and to prevent them from having an adverse effect on the client, the Company has issued internal guidelines and taken organisational precautions:
In the context of the financial services offered, the Company has identified conflicts of interest and informs its clients in a transparent manner on:
No other conflicts of interest have been identified by the Company.
b. Economic links with third parties in relation to the service provided
The Company may receive remuneration from third parties (commissions, retrocessions, rebates or any other benefits) in connection with the financial services provided. The Company shall inform its clients in the mandates of the rates of such remuneration. In all circumstances, the Company shall ensure that the client’s interests are protected, particularly in the event of conflicts of interest.
Information note issued by the Company dated 07.07.2022