DIN SPEC 77223:2016-02

This DIN SPEC has been prepared by a workshop (temporary committee) in the course of the PAS procedure. This DIN SPEC has been prepared and adopted by the authors named in the foreword. This DIN SPEC specifies requirements for the process of selecting suitable assets for structured asset planning. The process (the set of rules) supports financial advisors and the individuals of the private household in selecting investment types in order to achieve financial goals and wishes as safely as possible. The aim is to avoid wrong decisions or to identify the potential risk of asset loss at an early stage, prior to acquisition of an investment. The relevant laws, such as the Securities Trading Law and the Ordinance on Financial Investment Mediation (legal basis for financial advisors and brokers), are taken into account. The main focus is on the evaluation of the individual appropriateness and suitability of investments for the persons of the household in their respective life situation. It is mandatory to always consider the entire financial situation on the basis of a private balance sheet (private balance sheet, statement of revenue and expense) combined with an overarching investment strategy. As a rule, this approach is superior to the "singular" investment recommendation. In general a private investor (hereinafter referred to as "investor") expects the highest possible returns and/or profits for his assets while ensuring security and constant availability at the same time. This applies to both existing investments and to new investments. Asset investments serve different investment purposes, such as liquidity reserve, target savings, retirement provision and free asset accumulation. In reality the aforementioned expectations on the part of the investor are rarely fulfilled. Losses are possible. The application of DIN SPEC 77223 is intended to support the investor in assessing and evaluating risks and opportunities. The risk profile of an investor can be determined within the scope of a standardized process. Standardization contributes to the clarity and comprehensibility of the analysis - and also the evaluation and recommendation for action based on it. DIN SPEC 77223 is thus intended to be an instrument for the protection of the investor. Specifically, DIN SPEC 77223 specifies requirements for the analysis process within the scope of standardized asset and risk analysis for private investors. The analysis process includes data collection, standardized risk profiling for private investors and determination of the investment strategy per investment target. DIN SPEC 77223 specifies requirements for the analysis process as a part of consulting. The application of DIN SPEC 77223 basically requires a holistic analysis approach. The result of an analysis according to DIN SPEC 77223 is static in nature and reflects a snapshot. Singular product sales, for example new asset investments to "experienced investors" or "execution transactions without advice" within the scope of asset structuring measures are not an application within the meaning of DIN SPEC 77223. In general, all evaluations and recommendations for action that are made on the basis of this analysis are also components of the consultation. They do not fall within the scope of this DIN SPEC 77223. Within the scope of DIN SPEC 77223 existential risks that may arise from possible deficits in the areas of hedging and provision are taken into account. However, the topic addressed is not part of the assessment of risk-bearing capacity within the meaning of the Securities Trading Law (WpHG) and the Ordinance on Financial Investment Mediation (FinVermV). It is recommended to all advisory groups, both within the scope of the German Banking Law (KWG) and Securities Trading Law (WpHG) as well as the German Industrial Code (GewO) and the Ordinance on Financial Investment Mediation (FinVermV), that their clients (the investor) should receive guidance on the following material topics in the process of analysis according to DIN SPEC 77223, provided that these are relevant to the household (including all economically dependent persons): liability risks, basic health protection, disability/occupational disability/invalidity, incapacity for work, provision for surviving dependents, residential buildings. The committee DIN SPEC 77223 "Standardisierter Prozess für die Auswahl geeigneter Finanzanlagen für den Privathaushalt" ("Standardized process for the selection of suitable financial assets for private households") at DIN is responsible for this standard.