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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Grievance Redress Mechanism

Mr. Raman Iyer, a client, complains in writing to his investment adviser about an unsuitable recommendation. Which action best reflects good grievance handling practice expected of the adviser?

The adviser should acknowledge the complaint, investigate it, respond within the stipulated timeline and keep records of the complaint and the action taken. Ignoring it or pressing the client to withdraw it violates regulatory and ethical duties.

  1. AAcknowledge the complaint, investigate, and respond within the stipulated timeline while keeping recordsCorrect
  2. BIgnore it until the client approaches SEBI
  3. CAsk the client to withdraw the complaint in exchange for a fee waiver
  4. DForward it to the client's family to settle informally

Explanation

Advisers are expected to have a grievance redress system, to acknowledge and address complaints promptly and to maintain records of them. Pressuring withdrawal or ignoring complaints breaches ethical and regulatory duties and escalates risk.

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