Execution-Only Transaction and Transaction for an Insistent Client

Subject: Finance
Pages: 2
Words: 309
Reading time:
< 1 min

An execution-only transaction is a transaction carried out by a financial advisor or broker according to the will of the client. Under this arrangement, the client already understands what they want and requires no advice from the financial advisor concerning the transaction is required. The only task for the financial advisor is to carry out the instructions as per the client’s specifications. The financial services authority defines the situation using several parameters. First, the client has already identified the product they wish to invest in.

Secondly, they have stated the amount they wish to pay for the investment. In addition, they know exactly the financial service provider they intend to engage and finally, they know the fund as well as the terms of engagement if required. Under this transaction, there is no need for detailed form filling used by financial services providers for fact-finding meaning that transactions are fast. Again, the commission charged by the provider is drastically reduced as no advice is given. The only function of the provider is to follow the instructions as issued by the client and execute them according to the law.

On the other hand, transactions involving insistent clients on the other hand are distinguished by the fact that the client differs from the financial advisor and insists on the transaction as per his/her will. In such a case, the advisor may find it wise to withdraw from participating in the transaction. If not, then he/she should first ensure that the implications of the client’s decisions are fully explained to the client and confirmed in writing, the decision to go against the advice of the advisor is evidence on paper by the client in his/her own words. After this, the advisor can then carry out the client’s instructions without fear of being blamed.