Do you want to invest but do not know where to start? It would be true to say it is not the simple matter it might first appear, and that is why it is important to involve your bank before taking the step, so that it can support and guide you along the way. However, whenever you receive investment advice from your bank, the regulations (MiFID II) require an investor profile to be established about you. So, what is this about?
The world of banking and finance is subject to the MiFID II regulations, which are intended to offer the best possible protection to investors. For example, in banking, while “support” and “advice” might seem very similar, they are two very different things, because “advice” is very highly regulated. The difference is such that, when a bank is giving you advice, it is then obliged to determine your investor profile beforehand.
This aims to place you in a specific investor category, taking into account, among other things, your level of investment knowledge and your risk appetite. The advisor will consequently meet your requirements and offer investments matching your level as an investor and your investment strategy. This is done to avoid poorly-informed customers undertaking highly complex and/or excessively risky transactions, without being in a position to assess the real impact.
First of all, it is important to realise that banks distinguish retail customers from business customers. The first are typically customers who intend to start investing and have neither the knowledge nor the necessary experience, whereas business customers already possess this knowledge. This being so, retail customers receive the highest level of protection.
Once your categorisation as a customer becomes clear, your advisor will look at your yield objectives, risk appetite and other criteria to define your investor profile.
In the wake of the MiFID II directive, Luxembourg banks have developed a questionnaire for all their customers wishing to receive investment advice to determine their requirements and knowledge of the subject.
This questionnaire is completed by the advisor, who asks a series of questions, structured at two levels. Firstly, it seeks to identify the customer’s command of the financial products, and secondly it seeks to get to know the customer better.
More practically, the questionnaire contains the following components:
1. Your financial situation – an assessment of your income, capital and how you manage your finances.
2. Your requirements – the yield you are hoping to achieve, your appetite for risk, attitude towards losses, etc. will be determined.
3. Your plans – your investment horizon, and whether it is more short-term or long-term.
4. Your knowledge – the experience you demonstrate regarding existing financial products and your knowledge will be assessed.
Once the questionnaire has been filled in, a “score” is awarded on the basis of the investment period, risk appetite, etc. This score will ultimately determine your investor profile.
Refer to your bank in order to receive the best possible support.
Be honest and transparent with your advisor when filling in the questionnaire to establish your profile.
Accept the possibility that your perception of your spending might be wrong.
Do not forget that everything you disclose to your banker will be treated confidentially.
The holidays may already seem a long time ago, but the university year has only just started. Wasn’t it great to be able to switch off your alarm, spend time with your friends, go away and swim in the sea? But before you start thinking about your next holiday, make the most of this new university year!
Perhaps you're leaving home to go to university, move in with your partner or simply because it's time. Congratulations! From now on, you can deck the entire place out from top to bottom in your favourite colour and listen to loud music at three o’clock at night to boot. But now everything will cost money as well: here are some important tips on how to avoid going broke straight away.
First time at university, first job, first salary, first flat... and the list goes on! Life in your twenties is exciting. Everything is new and there is a myriad of ways to design your life. It doesn’t seem necessary to think about financial protection! However, now's exactly the best time to do so!
![[Translate to English:]](/fileadmin/_processed_/8/f/csm_272__FIN__Que_faire_apres_l_unif__01_0f17e00166.jpg "[Translate to English:]")
The back-to-school season often coincides with a new stage in your life. You still remember your early school days and here comes the last semester at uni. Next year will be a big unknown! Entering the world of work, doing additional training or taking a gap year? Any project requires a financial cushion!
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Louise is 19 years old and lives in Luxembourg with her mother and brother. She has just finished the last oral sessions on her final exams, and is waiting for the results. Phew! Soon a little rest and then the holidays. Despite being an excellent student, Louise put a lot of pressure on herself during her exams. Fortunately, her mother was very attentive, cooking her favourite dishes and supporting her as best she could during this stressful period.
If you have just finished your studies or started your professional life, you are probably not thinking about saving money. And even less about saving to buy a property. Your own apartment… that’s a lot of money and still seems a distant dream, right? OK, but what if we told you that you can get started right away? Here’s how!
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Wherever you choose to study, you're automatically entitled to financial aid! You're wondering how to go about it, or how interest rates work if you take out a state-guaranteed student loan! Find out all about financial aid, deadlines, rates and the 100% digital solution for obtaining your student loan.
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Baccalaureate diploma in hand? Your well-deserved holidays are almost over? Perhaps you've already started at university or you're making your final preparations before the big departure? Find out about your financial aid and the 100% digital Spuerkeess application via S-Net Mobile for your state-guaranteed student loan.
Do you find yourself brooding about your financial situation and not achieving your goals for saving and investing for your future? Making a financial plan can have a positive impact on your well-being. But how do you set a budget and stick to the plan? Discover our tips for becoming more Zen about your finances.
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In February you received the famous letter from the Tax Administration asking you to submit your tax return for the previous year. From now on, the deadline for submitting your return is 31 December of the following year. In order to take better advantage of the possibilities offered by the Luxembourg government to reduce your tax burden, we have grouped together for you the products that are deductible from the taxable amount. We have also provided you with a tool to help you manage your tax return more effectively, and above all to save time and money!
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We all need a financial literacy. Teaching children the basics about how money works, its value and why to save it can spare them so much hassle as adults.
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With Axxess you will automatically receive a debit card, and from the age of 15 you can apply for your first credit card. Do you already have a payment card – debit or credit? Do you know the difference?
