The Norwegian Financial Supervisory Authority has concluded that Njord Kapitalforvaltning placed excessive weight on clients’ investment horizons in its suitability assessments, creating a risk of unsuitable investment advice. The non-independent investment adviser also presented misleading cost information and insufficiently explained differing expected returns for the Onepointfive private equity alternative investment fund. These practices breached requirements governing suitability assessments, business conduct and clear, balanced and nonmisleading client communications. Njord’s former risk-scoring model could qualify clients in the lowest risk categories for alternative investment funds based on a sufficiently long investment horizon. The firm has revised the model so that clients in the lowest category cannot qualify for any alternative investment fund, those in the next-lowest category can qualify only for property funds with public-sector tenants, and clients with an investment horizon of less than five years cannot qualify for such funds. For Onepointfive, some investment-plan tables incorrectly showed zero costs even though costs were disclosed elsewhere. Clients also received different return targets, including about 20%, 25% and 25% to 30%, without adequate explanations of payment models, whether returns were before or after costs, or differences between PRIIPs and internal rate of return calculations. Njord has changed its cost presentation and client disclosures, and the authority has taken note of these measures.

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