Article 34
Specification of demands and needs and provision of advice
1.
Prior to the conclusion of a PEPP contract, the PEPP provider or PEPP distributor shall specify, on the basis of information required and obtained from the prospective PEPP saver, the retirement-related demands and needs of that prospective PEPP saver, including the possible need to acquire a product offering annuities, and shall provide the prospective PEPP saver with objective information about the PEPP in a comprehensible form to allow that PEPP saver to make an informed decision.
Any PEPP contract proposed shall be consistent with the PEPP saver’s retirement-related demands and needs, taking into account his or her accrued retirement entitlements.
2.
The PEPP provider or PEPP distributor shall provide advice to the prospective PEPP saver prior to the conclusion of the PEPP contract providing the prospective PEPP saver with a personalised recommendation explaining why a particular PEPP, including a particular investment option, if applicable, would best meet the PEPP saver’s demands and needs.
The PEPP provider or PEPP distributor shall also provide the prospective PEPP saver with personalised pension benefit projections for the recommended product based on the earliest date on which the decumulation phase may start and a disclaimer that those projections may differ from the final value of the PEPP benefits received. If the pension benefit projections are based on economic scenarios, that information shall also include a best estimate scenario and an unfavourable scenario, taking into consideration the specific nature of the PEPP contract.
3.
If a Basic PEPP is offered without at least a guarantee on the capital, the PEPP provider or PEPP distributor shall clearly explain the existence of PEPPs with a guarantee on the capital, the reasons for recommending a Basic PEPP based on a risk mitigation technique consistent with the objective to allow the PEPP saver to recoup the capital and clearly demonstrate any additional risks that such PEPPs might entail in comparison to a capital guarantee based Basic PEPP providing a guarantee on the capital. This explanation shall be done in written format.
4.
When providing advice the PEPP provider or PEPP distributor referred to in point (c) of Article 23(1) of this Regulation shall ask the prospective PEPP saver to provide information regarding that person’s knowledge and experience in the investment field relevant to the PEPP offered or demanded and that person’s financial situation including his or her ability to bear losses, and his or her investment objectives including his or her risk tolerance so as to enable the PEPP provider or PEPP distributor to recommend to the prospective PEPP saver one or more PEPPs that are suitable for that person and, in particular, are in accordance with his or her risk tolerance and ability to bear losses.
5.
The responsibilities of the PEPP provider or PEPP distributor shall not be reduced due to the fact that advice is provided in whole or in part through an automated or semi-automated system.
6.
Without prejudice to stricter applicable sectorial law, PEPP providers and PEPP distributors shall ensure and demonstrate to competent authorities on request that natural persons giving advice on PEPPs possess the necessary knowledge and competence to fulfil their obligations under this Regulation. Member States shall publish the criteria to be used for assessing such knowledge and competence.