Febelfin prefers to work with one integrated risk indicator, visualized by a single element. A single integrated risk indicator is the most transparent and understandable measure for a potential client to perform a product assessment in terms of risk/return. The integration of three different risks will provide simplicity for a retail investor. A single visualisation makes it easier to comprehend and compare all risks of different financial products (banking, insurance and investment).
The indicator should not only be limited to the integration of market and credit risk, but should preferably capture other risks such as Forex and liquidity risks. However, it should be possible to add narrative descriptions supplementing the risk indicator in the KID, for instance if certain risks are not captured in the risk methodology.
While a single indicator will add to the comparability of the various products regardless of the wrapper, it is necessary to use a methodology to assess and classify these risks that is neutral for the various types of structured products, irrespective of the type of wrapper. The use of one single methodology (e.g SRRI) as a common starting point may add to comparability. However, it should not be excluded that due to the specific nature of products, e.g. insurance products, a different methodology is needed.

Febelfin prefers to work with one integrated risk indicator, visualized by a single element. A single integrated risk indicator is the most transparent and understandable measure for a potential client to perform a product assessment in terms of risk/return. The integration of three different risks will provide simplicity for a retail investor. A single visualisation makes it easier to comprehend and compare all risks of different financial products (banking, insurance and investment).
The indicator should not only be limited to the integration of market and credit risk, but should preferably capture other risks such as Forex and liquidity risks. However, it should be possible to add narrative descriptions supplementing the risk indicator in the KID, for instance if certain risks are not captured in the risk methodology.
While a single indicator will add to the comparability of the various products regardless of the wrapper, it is necessary to use a methodology to assess and classify these risks that is neutral for the various types of structured products, irrespective of the type of wrapper. The use of one single methodology (e.g SRRI) as a common starting point may add to comparability. However, it should not be excluded that due to the specific nature of products, e.g. insurance products, a different methodology is needed.