Module 2 · Chapter 4

Opening an Account: Execution-Only, Appropriateness and Advice

An online broker may take orders without checking that they suit the client, but only for simple investments the client picks. Complex products need a test first. Advice needs a licence the broker lacks.

≈ 10 min read 8-question test

In this chapter

  • What execution-only means, and what the client gives up for a small fee
  • How the test for the leveraged notes works, and why Thalvia blocks a client who fails
  • When an app feature becomes advice, and what a client sees before the first trade

4.1Opening an account in one paragraph

Thalvia offers an execution-only service: it passes on the client’s own orders and gives no advice. For shares and ETFs, MiFID II lets it do that without checking what the client knows. For the leveraged notes, the client must first pass a test in the app. And the app must never tell a client what to buy, because that would be advice, a service Thalvia is not licensed to give.

Key point

Every order must be the client’s own idea. That is what spares Thalvia the checks an adviser must make, and it is what a careless app feature can break.

Also in this chapter

  1. Execution-only: the client decides, Thalvia passes the order on
  2. The appropriateness test for the leveraged notes
  3. Where an app feature becomes advice
  4. What the client sees before the first trade
  5. Your job

Preview

The rest of this chapter opens with a free account. Every edition is free to read until 31 January. Open a free account by the end of that day and keep every edition published by then, for good. Open it from the edition home →