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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Case Studies in Comprehensive Financial Advice

In preparing a comprehensive financial plan for a new client, which step should an investment adviser complete first, before recommending any product?

The adviser should first gather the client's goals, financial data and risk profile. Every later step, including asset allocation, product selection and periodic review, depends on this information, so recommending products before it is collected would make the advice unsuitable.

  1. AGather the client's goals, financial data and risk profileCorrect
  2. BSelect mutual fund schemes for the portfolio
  3. CFinalise the asset allocation percentages
  4. DSet a schedule for reviewing the portfolio

Explanation

Advice must rest on the client's circumstances. Goals, income, expenses, assets, liabilities and risk profile are gathered first. Asset allocation, product selection and review all depend on this information, so they come later.

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