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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

In the operational set-up of an investment adviser's dealings with a client who invests through a mutual fund distributor platform, which document records the client's agreed scope of services, fees and responsibilities before advice begins?

The investment advisory agreement is the document that records the scope of services, fees and mutual responsibilities between adviser and client. It is signed before advice starts, whereas scheme documents, contract notes and depository forms serve other purposes.

  1. AInvestment advisory agreementCorrect
  2. BAccount opening form of the depository
  3. CScheme information document of the fund
  4. DContract note issued by the broker

Explanation

An investment adviser must enter into a written agreement with the client that sets out the scope of services, fees and the rights and duties of both parties. The SID describes a scheme, the contract note records a trade, and a depository form opens a demat account; none of these defines the advisory relationship.

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