Product Risk Indicator (PRI)

Product Risk Indicator (PRI)

A New Risk Rating for Better Investment Risks and Investor Risk Profiles Management

Better Appropriateness and Suitability Checks for Better Advisory

The PRI (Product Risk Indicator) by SIX enables wealth managers and client advisors to compare the risks of investments across different asset classes, choose and recommend risks suitable to their clients' investments and explain the risks in an intuitive and easily understandable manner.

Derived from the SRI (Summary Risk Indicator) methodology and adapted for non PRIIP asset classes, it allows a comparison of instrument risks across whole portfolios and all asset classes.

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How You Will Benefit

One Indicator

The PRI can be directly compared to an SRI on a PRIIP‑KID relevant financial instrument. Avoid two indicators which will lead to confusion for SRI relevant instruments.

Cost Efficiency

No additional risk indicator is needed for instruments carrying an issuer‑calculated SRI. The SRI can be used for instruments which already exist.

Easy Access

The PRI data set is available through the same channels our clients already use for regulatory services.

Enrich Your Suitability Toolbox with a Universal Risk Indicator

Several recent regulations have made it crucial for the advisory business to match the risk of an asset with the client’s ability and need to take it. Therefore, the issuer‑calculated Summary Risk Indicator (SRI) is now mandatory for structured products and derivatives, whilst for UCITS funds, a Synthetic Risk and Reward Indicator (SRRI) currently exists (expected to be migrated to an SRI by 2022). But what about the other asset classes (bonds, equities...)?

SIX decided to build a universal indicator that is comparable to the SRI: the PRI, a risk “rating” representing the risk of not PRIIP-KID relevant security. Each PRI has a value between 1 (lowest risk) and 7 (highest risk) and is derived from a market risk and a credit risk measure.

Marcello Solida

Derived from the existing regulatory framework, the PRI is a new risk indicator standard that aims at helping investment professionals gaining competitive advantage with their advisory process.

Marcello Solida, Senior Product Manager, SIX

Product Suitability in the Investment Process

With new regulations and reporting rules, investors face an increase in administrative work, which might come as a burden, but it doesn’t have to be. Watch our webinar to find out how SIX can help wealth managers and client advisors monitor the suitability and appropriateness of investment products in order to match them to the risk profile of their clients.

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About This Service

European and Swiss investor protection regulations (MiFID II and FinSA) have stressed out the importance for financial institutions of monitoring the suitability and appropriateness of financial instruments they sell to their customers. The PRI helps wealth managers to compare the risk of financial instruments to the risk profile of investors and recommend suitable investments.

PRI Service Overview

With the PRI, Wealth Managers and Clients Advisors can go beyond regulatory requirements as they can easily compare the risks of instruments from all asset classes and match them to the risk profile of retail clients. Read our factsheet to find out.

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Data Scope of PRI

It is derived from the SRI methodology and adapted to non-PRIIP asset classes. It allows comparison of instruments’ risks across all asset types, including UCITS funds and where SRI is applicable.

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