Precision English for Suitability Notes: MiFID II Suitability Wording—Client-Facing English That Builds Trust

Step 1: Anchor and Purpose—Why a MiFID II Client-Facing Suitability Note Matters

A suitability note under MiFID II is not just an internal record; it is a client-facing explanation that connects the client’s profile with the advice given and the product selected. Its purpose is to show that the recommendation is suitable for the client’s situation at the time advice is provided. This note must demonstrate a clear reasoning chain: who the client is, what they want and can accept, why a particular solution fits, and how risks and costs were weighed. When written in precise, plain English, it also builds trust—especially with ultra-high-net-worth (UHNW) clients who expect professional clarity without marketing gloss.

MiFID II requires firms to explain why each recommendation is suitable, including the client’s objectives, risk tolerance, capacity for loss, financial situation, knowledge and experience, and sustainability preferences. The note should allow an auditor to see evidence, not just conclusions. For the client, it should read as a fair and balanced account of the discussion and the decision. This balance is essential: it protects the client by clearly stating risks and trade-offs, and it protects the firm by documenting the rationale in a way that is testable and reproducible.

The regulatory anchor also includes a language expectation. MiFID II demands clarity that an average retail client can understand. However, UHNW clients may be sophisticated. The writer’s challenge is to achieve clarity without condescension and to maintain technical accuracy without slipping into jargon. The solution is to prioritise terms that are widely understood, to define any necessary technical terms in plain English, and to present risk in proportion to the client’s profile. The note should never imply guarantees, hide material costs, or omit realistic alternatives. It should show alignment between the client’s stated needs and the product’s actual characteristics, with enough detail to demonstrate care and diligence.

Finally, the suitability note matters because it is the durable record that survives beyond the meeting. Markets move and memories fade. If a recommendation is later reviewed, this note will be the reference point. It should therefore be complete, consistent, and readable—an accurate reflection of the advice process and the client’s informed choice at that point in time.

Step 2: Model Structure—A Modular Template with Precise, Compliant, Diplomatic Phrasing

A high-quality suitability note follows a clear structure. Using a modular approach helps you cover all required elements systematically, and it ensures consistency across client files. The following sequence meets MiFID II expectations and supports client trust.

• Client Profile

  • Purpose: Provide a concise, factual snapshot of who the client is and the personal and financial factors relevant to the recommendation. Include relevant experience, time horizon, liquidity needs, and constraints. Avoid extraneous detail that does not affect suitability.
  • Good phrasing principles: neutral tone, verifiable statements, and time-stamping of key facts. Replace general labels like “experienced investor” with concrete anchors, such as length of investing history, asset classes used, and decision frequency.

• Investment Objective & Constraints

  • Purpose: Translate the client’s goals into a specific, measurable objective with constraints that guide product selection. Objectives may include growth, income, capital preservation, or diversification; constraints may include timelines, liquidity windows, currency preferences, or ethical/sustainability preferences.
  • Good phrasing principles: specify horizons (“near-term,” “5–7 years,” “multi-generational”), define return needs as ranges, and tie each constraint to its practical implication for product choice.

• Recommendation & Rationale

  • Purpose: Identify the recommended product or portfolio change and explain the reasoning. Show how the recommendation aligns with the profile and objective. Distinguish between required features and desirable features.
  • Good phrasing principles: lead with alignment, then explain selection criteria, underlying assumptions, and the expected role within the client’s portfolio (core, satellite, hedge, diversification, income source). Keep language factual and testable.

• Risk, Costs, and Alternatives

  • Purpose: Present key risks in proportion to the client’s tolerance and capacity for loss. Itemise material costs and disclose their impact. Offer realistic alternatives, including a “do nothing” option if relevant, and explain trade-offs.
  • Good phrasing principles: use calibrated risk language, avoid guarantees, and state conditions under which outcomes may differ. Costs should be transparent, with plain-English descriptions of ongoing and one-off fees. Alternatives should be credible, not straw men.

• Capacity for Loss & Sustainability Preferences

  • Purpose: Confirm the client’s capacity for loss and the extent to which the recommendation fits this capacity. Address sustainability preferences explicitly, including how the product meets or does not meet stated ESG or sustainability criteria.
  • Good phrasing principles: distinguish “tolerance” (psychological comfort) from “capacity” (financial ability to absorb loss). For sustainability, connect the client’s stated preferences with product characteristics, disclosures, and any compromises made.

• Next Steps & Client Acknowledgment

  • Purpose: Document the agreed actions, timelines, and any further information required. Record the client’s acknowledgment of key points, including risks and costs, without implying that acknowledgment equals consent to all outcomes.
  • Good phrasing principles: define dates, responsibility, and conditions. Keep acknowledgments clear and non-coercive.

When you write within this structure, think of each section as answering a precise question. For example: Who is the client as an investor? What are they trying to achieve and within what limits? Why is this recommendation a fit now? What could go wrong and what will it cost? What else could we do instead? Can the client absorb adverse outcomes? What did we agree to do next, and when?

Step 3: Language Toolkit—Reusable Stems, Risk Calibrators, and UHNW Sensitivities

Trust with UHNW clients comes from precision, neutrality, and respect. The goal is to use language that is specific enough for auditability and clear enough for non-specialist reading, while demonstrating a professional tone that neither oversells nor evades hard truths. Use the following principles to guide your wording across the note.

• Precision over persuasion

  • Replace vague adjectives with measurable descriptors. For instance, use timeframes, ranges, and probabilities where possible. Present facts and sources rather than claims. Avoid superlatives unless they are objectively provable (and cite the basis).

• Neutral and verifiable language

  • Use verbs that describe rather than promise. Prefer “is designed to,” “seeks to,” or “may” to “will.” Use “based on” and name the source or assumption. Cite the date of data or disclosures to anchor the note in time. Avoid marketing phrases and avoid implying certainty about market outcomes.

• Proportionate risk signposting

  • Present risks in order of materiality for the client’s situation. Explain the nature of each risk (market, credit, liquidity, currency, concentration, interest rate, regulatory, ESG controversies) and its practical impact. Connect risk to the client’s capacity and the product’s mechanisms for risk management or mitigation. Use clear signal phrases that show limits and conditions.

• Respectful optionality

  • Offer choices without pressure. Present the main recommendation together with credible alternatives, and explain the trade-offs. Acknowledge the client’s preferences and constraints even when they limit options, and avoid judgemental wording. Make it straightforward for the client to request further information or to defer a decision.

• Plain-English micro-phrases for compliance and diplomacy

  • Use short, reusable stems across the note to maintain clarity and consistency. These should be scalable to UHNW contexts, where complex structures, multiple jurisdictions, and family governance considerations may apply. Keep sentences short and active, but always precise and balanced.

• Calibration of modality (may/can/could vs. will)

  • Modality is a key risk control. “May” signals possibility; “can” signals capability; “could” signals conditional possibility; “will” should be reserved for outcomes within the firm’s control (e.g., process steps) rather than market results. This helps prevent implied guarantees.

• Transparent cost language

  • Costs should be simple to find, simple to read, and expressed in both percentage and monetary terms where feasible. Distinguish between ongoing charges, one-off fees, and performance-related fees. Explain how costs affect net outcomes over the stated horizon in non-technical terms.

These principles help you manage both regulatory obligations and the expectations of discerning clients. They show that you understand the client’s position, that you are candid about risks and costs, and that your recommendation is reasoned rather than promotional.

Step 4: Quality Control—Red Flags, Self-Audit, and Immediate Application

A suitability note must stand up to internal review, regulatory scrutiny, and client reading. Quality control is where you test your language and content against three dimensions: auditability, readability, and documentation hygiene.

• Red flags to eliminate before sign-off

  • Jargon that is not explained or necessary. If a technical term is required, define it briefly in plain English. Avoid product-specific buzzwords unless they are in regulatory documents and you explain them.
  • Implied guarantees or overconfident language, such as “will outperform,” “assured income,” or “capital protected” without qualification. Replace with calibrated modality and clear conditions.
  • Incomplete rationale that describes the product but not the fit. Your reasoning must connect the client’s profile and objectives to the product’s features and risks.
  • Missing alternatives. If the client rejected an option or if there were credible substitutes, record them and explain the trade-offs. Include the “do nothing” option when relevant.
  • Vague risk statements such as “market risk applies.” Be specific: what kind of market risk, how it could manifest, and what the practical consequences are for the client.

• Quick self-audit checklist for auditability

  • Who: Have you identified the client and any relevant entities (trusts, holding companies) precisely?
  • What: Is the recommended action described clearly, including size, currency, and timing?
  • Why: Is the rationale specific to the client’s objectives and constraints, not just generic product advantages?
  • How: Have you explained how the recommendation achieves the objective, including mechanisms and assumptions?
  • Evidence: Are sources, dates, and key disclosures included or referenced?
  • Risks: Are material risks stated plainly and proportionately, with conditions and limits?
  • Costs: Are all material costs disclosed in a way a non-specialist can understand?
  • Alternatives: Have you recorded realistic alternatives and the reason for the final choice?
  • Capacity for loss and sustainability: Are both addressed explicitly and tied to the product’s characteristics?
  • Next steps: Are responsibilities, timelines, and client acknowledgments documented?

• Client readability and tone

  • Aim for short sentences and clear paragraphing. Use headings that match the structure. Keep the reading level accessible without diluting meaning. Where you must include technical content, use signposts like “In brief” and “In more detail” to support different levels of reader comfort. For UHNW clients, maintain a professional, even tone that respects their experience and privacy.

• Documentation hygiene

  • Date the note and label versions. Record the names and roles of the people who contributed, the sources consulted, and any approvals obtained. Ensure the note aligns with the KYC file and the latest client meeting records. If assumptions are time-sensitive (e.g., interest rates), note the date so future reviewers can contextualise the recommendation.

• Mini practice brief for immediate application (how to think, not an exercise)

  • When you begin drafting, assemble the client facts that matter for suitability: objectives, constraints, risk tolerance, capacity for loss, liquidity needs, time horizon, sustainability preferences, knowledge and experience. Translate each into a one-sentence anchor that you can reference in your rationale. Then, outline the product’s key characteristics and map them directly to those anchors. Next, list risks and costs in order of materiality for this client. Identify at least one credible alternative and the “do nothing” option, and write a one-sentence trade-off for each. Finally, write the next steps with clear dates and responsibilities, and prepare an acknowledgment that summarises what the client understood and agreed.

By integrating these quality controls, you reduce the risk of omissions, prevent tone drift toward sales language, and ensure your note is both client-centric and regulator-ready.

Bringing It Together—From Purpose to Professional Clarity

A MiFID II suitability note must show alignment between the client’s profile and the recommendation, in language the client can understand and an auditor can test. The modular structure keeps your writing disciplined: start with the client, define their objectives and constraints, present your recommendation with a specific rationale, and then address risks, costs, and alternatives. Confirm capacity for loss and sustainability preferences. Close with next steps and acknowledgment. Each section should be factual, balanced, and time-stamped.

The language principles—precision over persuasion, neutral and verifiable phrasing, proportionate risk signposting, and respectful optionality—ensure your tone is professional and trustworthy. Reusable stems and micro-phrases help you write consistently and efficiently across multiple notes, while modality control prevents implied guarantees. Transparent cost language supports informed decisions and respects client autonomy.

Finally, rigorous quality control turns a good draft into a robust record. Check for red flags, verify auditability, and keep documentation clean. Remember that UHNW clients value clarity, discretion, and candour. A well-crafted suitability note is a signal of your professionalism: it respects the client’s intelligence, meets regulatory standards, and leaves a clear trail of reasoning. Over time, this disciplined approach builds not only compliant files but also durable trust.