1This Annex belongs to COBS 10.2.9G(1)(m).
When determining whether a retail client has the necessary knowledge to understand the risks involved in relation to a long-term asset fund, a firm should consider asking the client questions that cover, at least, the following matters:
the possibility that the client could see the value of the amount they invest go down;
the potential illiquidity of LTAFs and their underlying assets;
the extent to which the protection of the Financial Ombudsman Service or FSCS apply to the investment activity (including the fact that these services do not protect investors against poor investment performance);
the nature of the client’s contractual relationships with (AF);
the risk to any management and administration of the client’s investment in the event of AF becoming insolvent or otherwise failing.