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The Spaniard

Received An Intrusive Questionnaire From My Stockbroker

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I have just received in the post from my stockbroker (since 2002) what I consider to be a most intrusive and unnecessary questionnaire. Their justification for this ‘records review’ is compliance with Money Laundering Regulations 2007 and with the Joint Money Laundering Steering Group Guidance.

After some general personal details are requested (which they must have on record already), and a reasonable request for a certified bank statement to prove identity yet again, there follows a section entitled Source of Wealth which asks:

What is your total net worth?

Over what timeframe was this wealth generated?

In which countries has this wealth been created?

Has any of your wealth been derived from employment?

If yes, how much of your total wealth was derived from employment?

Provide detailed description of the source (if from previous employment, please name employer).

Provide details of amount involved.

Provide a detailed description of the timescales involved.

Has any of your total wealth been derived from a different source to those listed previously? (e.g. investment/trading activity, selling assets or legal entities, inheritance etc.)

If yes, provide detailed description of the source(s)

Provide details of amount involved.

Provide a detailed description of the timescales involved.

Is this serious? Is Big Brother really now demanding this level of detail?

Or are the stockbrokers making a shabby attempt to glean valuable marketing information from their customers?

Disturbingly, the questionnaire is accompanied by a FAQ sheet which has veiled threats to “place restrictions on your account” should you fail to complete all of the form or should you attempt to transfer your account to another stockbroker (my first thought!) before doing so.

HPCers, comments please, particularly if knowledgeable in compliance law.

Thanks.

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I also recived one of these letters. I filled it in with various wishly washly answers and send in back. Would be interested if anyone knows if there is a deeper meaning to this survey.

BTW; I'm not liking this new forum layout! Firefox can't seem to check my spellings in the reply box now! Expect many more spelling errors from me from now on!

Edited by renting til I die

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There is no legal requirement for them to ask for that level of detail. They're just fishing for info they can use to sell you more stuff under the guise of 'only following the rules'.

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Looks like they have had problems with some regulator over their client records and are trying to prove they are clean. They are looking to identify clients outside the norm, or those that don't answer, so they can kick them out. If you want some fun write back and ask them for the exact chapter and section of the JMLSG they are required to ask this under. Might mean you get kicked out though.

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I had the same experience with FairFX when I recently moved most of my UK savings to the US to buy a house there shortly after my emigration. They asked for a extensive and detailed amount of personal information about how I'd acquired the money in the first place, where it was going, etc. etc., claiming that this was required under money laundering regulations. When I later discussed this with the accountant who has just done my first US tax return (who is familiar with both US and UK financial law), she told me that all they needed to have asked was for confirmation that the money was personal savings out of post-tax earned income and that I intended to use it to buy a house. If the IRS decides to audit me they could ask for documentation to prove that, but I am under no legal obligation on either side of the Atlantic to provide that or any further explanation preemptively. Needless to say, that is the last time I'll be using FairFX.

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No legal expert but I know they are supposed to establish your identity at the earliest possible opportunity, ie when the business relationship starts, not 12 years down the line. Also, they should be establishing the source of funds at the time of receiving them from you, not weeks, months, years after the fact, and not after they have already actioned your orders and taken their commission/fee.

It does seem unusal to me as a layperson. A lot of those questions dont even seem relevant to what is required of them. They have to prove the source of actual funds you give them, when you give them. They dont need all that general information about every nook and cranny of your entire life to do that. Sounds like profile building.

I just dont understand how the questions are justified out of the blue like that if they are not in response to a current attempt by you to hand them funds. All of the anti-laundering requirements should have already been fulfilled by them. Even if the questions are in response to you giving them funds, it doesnt take all that information to prove source.

Are the two of you first posters with the same broker I wonder? Would be interesting to get the opinion of a lawyer.

Personally, this is the sort of thing that I find offensive and I would like to mess with them if they are trying it on. But its easy to say when its someone else dealing with it. If they are dicks they might try and say your refusal to answer, or your attempt to change broker is suspicious behaviour, and you wont even know they have reported you. I just cant understand how they would be justified though if its not in relation to an actual transaction.

Really need a lawyers input.

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I got the same letter. OP: was it from Selftrade?

Some of the questions are a joke and none of their business.

The important stuff was provided when I opened the account, and now they are askign for it again!

takes' the P*ss

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I got the same letter. OP: was it from Selftrade?

Some of the questions are a joke and none of their business.

The important stuff was provided when I opened the account, and now they are askign for it again!

takes' the P*ss

I'm also with selftrade. Overall I've found them to be pretty good (and cheap) and since I'll being with them, they have made improvements to the site that I really like. Its a shame that they have sent this intrustive questionnaire which has made me consider whether I will continue to stay with them. As I said, because of the threat of restrictions, I send the form back with made up numbers (the correct name and address of course!). I can't see them really looking into them as they are problably just fishing for info but if I get a visit from the men in dark suits I'll let you know!

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Your total net worth cant possibly be any of their business.

Problem is the regulators say to them during an inspection "look, we have reviewed the spainards file and we don;t think you know enough about his background and source of wealth. If you don't do better next time we will fine you $100 million"

hence the brokers run around and try to get lots of stuff from clients out of fear. Blame the government, not the broker.

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It is not quite the same, since it's a firm of investment managers, not stockbrokers, but we have had a fair stash with ours (a very old firm) for several years and AFAIK they have never asked for this sort of info. The principle is the same, I.e. handling money on a client's behalf.

I would have thought an assurance that the money is from legit sources should be enough (employment, inheritance, previous investments, wins on the Ernie bonds, whatever) with maybe rough percentages, should be enough. As for wanting to know your total net worth, I do not see that this is ever anyone else's business, unless the police or the taxman have legitimate grounds for suspicion. Though I have certainly been asked this sort of question (maybe not quite as blatantly) by my bank when moving fairly large sums around - of course they only wanted to know so they could try to flog me their own 'products'.

I think that the main reason for wanting to know how much you've got is usually so that they can persuade you into giving them more of it to charge fees on.

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My wife has received this questionnaire from Selftrade.

As others have said, they have obviously been roasted by the FCA for non-compliance with money laundering regulations (more specifically those aspects related to record keeping).

I think tone of the letters is ill-advised: they could have offered something closer to an apology rather than a threat.

The moneybox item was interesting but offered no guidance for those affected. I'm inclined to provide the most simplistic interpretation of our finances possible, which will get them off our back yet avoid as much of the admin hassle as possible.

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Your total net worth cant possibly be any of their business.

If you take investment advice from them then it is because the advice is meant to be based your entire net worth.

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