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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 must an investment adviser do regarding risk profiling of a client?

An investment adviser must collect the client's information, assess the client's risk profile and ensure that the advice and products recommended are suitable for that profile. It is mandatory, remains the adviser's own responsibility, and should be reviewed periodically instead of done once.

  1. AConduct risk profiling only if the client asks for it
  2. BObtain information and assess the client's risk profile, and ensure advice and products are suitable to itCorrect
  3. CDelegate the risk assessment entirely to the product issuer
  4. DDo the assessment once and never update it

Explanation

The regulations require the adviser to obtain necessary client information, undertake risk profiling and ensure suitability of advice. It is a mandatory step, not optional, and cannot be handed to the issuer. Profiles should be updated periodically, so the 'never update' option is wrong.

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