Skip to content

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

Under the SEBI (Investment Advisers) Regulations, 2013, which is the correct requirement regarding risk profiling of a client?

An investment adviser must collect information from the client, assess the client's risk profile before giving advice, and maintain records of it so that advice is suitable. There is no exemption for existing mutual fund investors or small amounts, and the profile should be updated as circumstances change.

  1. ARisk profiling is optional if the client is already an investor in mutual funds
  2. BThe adviser must obtain information from the client and assess risk profile before giving advice, and keep recordsCorrect
  3. CRisk profiling is needed only for clients investing more than Rs 1 crore
  4. DThe client's risk profile must be fixed once and never revised

Explanation

Regulations require an adviser to do a risk profile of each client, based on information obtained, and ensure suitability of advice. Records must be maintained. There is no exemption for existing investors or a value threshold, and profiles should be updated.

Did you get it right without looking?

One question tells you little. A timed set on Risk Profiling for Investors shows your real accuracy, how long you take and where you lose marks.

Practise Risk Profiling for InvestorsFree diagnostic mock

More Risk Profiling for Investors questions