Methodology to Define the Target Market for Category Knowledge and Experience Using Focus Group for PRIIPs

Abstract

Under the MiFID II Product Governance rules, it is fundamental to define the target market of products offered to clients. The purpose of this research is to create a methodology, which defines and classifies financial products according to their level of complexity and risk, in order to match with investors’ knowledge and experience categories and find the adequate distribution strategy. Focus groups’ interview techniques were applied to segment the main characteristics of investors’ knowledge, experience, risk tolerance and aversion preferences for PRIIPs.