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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Risk Profiling for Investors

Under the SEBI (Investment Advisers) Regulations, 2013, what is an investment adviser required to do regarding a client's risk profile?

An investment adviser must assess the client's risk profile and ensure that the advice given is suitable to that profile. This duty applies across products, requires proper assessment rather than mere self-declaration, and the adviser must maintain records of the profiling.

  1. AObtain the risk profile once at onboarding and never revisit it
  2. BUse the client's risk profile only for equity products
  3. CLet the client self-declare any profile without assessment
  4. DCarry out risk profiling of the client and ensure advice is suitable to that profileCorrect

Explanation

Regulations require advisers to profile the client's risk and ensure suitability of advice with that risk profile, with records maintained. Self-declaration without assessment and one-time use do not meet this duty, and it applies to all products, not only equity.

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