In-boarding

Paolo Sironi and Maurizio Ravezzi

The advisory phase known as in-boarding corresponds to processes that lead to the proposal of the investment solution. This chapter describes the basic components of in-boarding and gives relevance to the framework built on probabilistic scenarios based on Monte Carlo simulations over time, both at product (Priips) and portfolio levels. The probabilistic approach is methodologically consistent with both regulations, because it grants advisers the ability to measure and track the value of their advice over time, and helps investors understand the added value they offer.

INTRODUCTION

An investment solution must be based on commitments defined in the on-boarding phase. Yet, investors and their wealth take centre stage because they are economic agents transforming the risks of financial markets to serve their personal goals. This enriched financial advice leverages on MiFID II regulatory requirements beyond simple compliance and finds a configuration of cost that creates value for clients. Stochastic scenarios allow an in-boarding phase to be designed that is robust from the point of view of financial engineering, obviously compatible with regulation, but also intuitive to help

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