What does MiFID II Article 25 require?

When a firm gives investment advice or portfolio management, Article 25(2) requires it to assess the client's knowledge and experience, financial situation including ability to bear losses, and investment objectives including risk tolerance. A recommendation must be suitable across all three of those dimensions.

Why is my profile set by the weakest dimension?

Because MiFID suitability is a floor, not an average. A firm cannot recommend an aggressive portfolio to someone with deep market knowledge but no financial buffer, or to someone with money to spare but no risk appetite. The tool mirrors this by binding your tier to the lowest of the three scores.

What do the five tiers mean?

They run from conservative (capital preservation, cash and short bonds) through moderate, balanced, and growth, to aggressive (concentrated equities and, only with proven knowledge, complex products). Each tier comes with an indicative asset-class universe rather than specific product recommendations.

Is this a regulated suitability report?

No. This is an educational self-assessment that illustrates how MiFID suitability logic works. It is not personal advice, does not know your full circumstances, and cannot replace the formal suitability process a regulated firm must carry out before advising you.

Does this cover appropriateness for execution-only?

Not directly. MiFID also has a lighter appropriateness test for non-advised sales of complex products, focused only on knowledge and experience. This tool models the fuller suitability test used for advice and discretionary management, which additionally weighs your financial situation and objectives.

MiFID II Retail Investor Suitability Self-Assessment

MiFID II requires investment firms to check that any product they advise on or manage is suitable for the client across three dimensions: knowledge and experience, financial situation and ability to bear losses, and investment objectives and risk tolerance. This self-assessment scores each dimension and shows the risk tier those answers would support, for education only.

How it works

Each question feeds one of the three Article 25 dimensions. The tool scores each dimension as a percentage of its maximum, then takes the lowest as the binding constraint — because a firm may only recommend what is suitable across all three:

knowledge%  = experience + product familiarity
financial%  = horizon + buffer + share of wealth
tolerance%  = loss reaction + stated objective
binding     = min(knowledge%, financial%, tolerance%)  → risk tier

A binding score under 20% maps to conservative, and each 20-point band steps up through moderate, balanced, growth, and aggressive.

Notes and example

Imagine a client who has traded shares for a decade (high knowledge) and is comfortable holding through a crash (high tolerance), but is investing money they may need within a year and that represents most of their savings. The financial dimension scores low, so it becomes the binding constraint and caps the profile at conservative or moderate — exactly the outcome MiFID intends, since the money cannot safely take equity risk regardless of the investor’s appetite or expertise. This is educational only and is not personal advice or a regulated suitability report. Everything is computed locally in your browser.