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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Key Regulations

Under the SEBI (Investment Advisers) Regulations, 2013, which of the following is a general obligation of an investment adviser regarding client risk profiling?

An investment adviser must gather necessary client information and carry out a risk profile assessment before giving advice, so that recommendations are suitable for the client. This duty applies to all clients and rests with the adviser, not the product issuer.

  1. ARisk profiling is optional for clients who are experienced investors
  2. BThe adviser must obtain information from the client and assess risk profile before giving advice, ensuring suitabilityCorrect
  3. CRisk profiling is needed only once at registration of the adviser
  4. DRisk profiling is done by the product issuer, not the adviser

Explanation

Advisers must collect relevant client information, carry out risk profiling and risk assessment, and ensure advice is suitable to the client's profile. This applies to all clients regardless of experience and is an adviser responsibility, not the issuer's.

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