When information becomes advice, the suitability assessment, what to do when a product does not fit, independent versus non-independent advice, the suitability report, and the knowledge-and-competence rules for staff.
When information becomes advice
- A personal recommendation to a client about crypto-assets is advice, a licensed service under MiCA.
- General information is not advice, but staff who give information also need the right knowledge and competence.
- Be clear with the client which of the two you are giving.
The suitability assessment
- Before advising or managing a portfolio, collect the client's knowledge and experience, objectives including risk tolerance, and financial situation including ability to bear losses.
- Check that the client understands the risks of the crypto-assets involved.
- Review each client's suitability assessment at least every two years.
When the answer is no
- If a crypto-asset is not suitable for the client, do not recommend it.
- If the client does not give the information you need, do not give advice.
- Record the reasoning either way.
Independent or not
- Tell the client up front whether the advice is independent.
- Independent advice means assessing a sufficient range of crypto-assets and not keeping fees or benefits from third parties.
- Explain the costs of the advice and of the crypto-assets recommended.
The suitability report
- Give the client a report that explains the advice and how it fits their preferences, objectives and situation.
- Write it for the client, not for the file.
- It becomes your best evidence if the advice is ever questioned.
Knowledge and competence
- MiCA requires staff who give advice or information on crypto-assets to have the necessary knowledge and competence.
- ESMA guidelines set the criteria, covering initial qualification, supervised experience and yearly training.
- Firms must be able to show the supervisor that staff meet them, not just that they attended a course.
Key takeaways
- No complete client information, no advice.
- Not suitable means not recommended, whatever the client asks.
- The suitability report is your evidence. Make it clear and specific.
Sources
- Regulation (EU) 2023/1114 (MiCA), Article 81, EUR-Lex
- ESMA: Markets in Crypto-Assets Regulation (MiCA)
Educational content only, not legal, tax or investment advice. Based on Regulation (EU) 2023/1114 (MiCA) and related EU texts as of September 2026. Check the official texts before relying on anything here.