/ Fintec Law: Client Segmentation to Ensure Financial Adequacy

Fintec Law addresses client segmentation and its relationship with the offer of financial products and services. We explain how service providers must classify their clients according to their profile and other relevant aspects.

Maria Ignacia Ormeño Sarralde
Associate Attorney
Alessandri Abogados

The Fintec Law (Law No. 21,521), recently enacted, includes provisions on the adequacy of financial product and service offers to the profile of clients. But what exactly does this adaptation mean?

The law establishes that financial service providers regulated by this regulation must adopt policies, procedures and controls to avoid offering products that do not fit the needs, expectations and risk appetite of their customers. It is crucial that clients communicate in advance to providers what type of product or service they wish to contract, specifying their preferences and requirements.

This requirement implies that financial service providers carry out a segmentation of clients and classify them into different categories, considering different aspects related to their profile. Fintec Law establishes that this segmentation may be carried out by requesting information on the client’s knowledge and experience as an investor or financial user, their financial situation and their investment, savings, financing or insurance objectives, in relation to the financial product or service they wish to contract. In addition, providers must inform clients about the characteristics, conditions and risks associated with such products and services.

If a client decides to contract a service that the provider considers does not fit the profile communicated by the client, the provider must take measures to warn and document this discrepancy. This is to protect the client and ensure that any warnings are made in a timely and transparent manner, including to the Financial Market Commission during its audits. Therefore, it is essential that providers have traceability and safeguard mechanisms to demonstrate that the client has been warned about the incompatibility between the product or service requested and their real needs, considering, for example, their financial experience.

In addition, the Fintec Law establishes that any information, propaganda or advertising provided on financial products or services may not contain statements, allusions or representations that are misleading, deceptive or misleading as to their nature, prices, profitability or other characteristics, including those related to the providers. For service providers, this poses an additional challenge in communicating with their clients, as they must transmit accurate, clear and transparent information to avoid any doubts regarding the product or service they are contracting, as well as the terms and conditions associated therewith.

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