FINMA issues guidance on risks in individual portfolio management

FINMA, the Swiss Financial Market Supervisory Authority, published a new Guidance today that details the risk patterns it is increasingly observing in the use of products within individual portfolio management.

Individual portfolio management refers to the discretionary handling of client assets by banks, wealth managers and other financial institutions, where investment products are selected and allocated on a client‑by‑client basis.

The Guidance notes that FINMA has identified a rise in escalation cases – situations where the risk profile of a product or strategy intensifies and triggers supervisory concern – across a range of product types.

It reiterates the regulatory rules that institutions must follow when employing such products, including due‑diligence, suitability assessments, transparent reporting and ongoing monitoring of client exposure.

Failure to comply may lead FINMA to intervene, impose remedial measures or, in severe cases, sanction the institution under the Swiss Financial Institutions Act.

The new document builds on FINMA’s earlier supervisory notices on product governance and aligns with its broader mandate to safeguard market integrity and protect investors in Switzerland’s financial sector.

Industry participants are expected to review internal procedures and adjust risk‑management frameworks to meet the Guidance, which FINMA says will be enforced through routine inspections and targeted supervisory reviews.