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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

Which activity is part of the back-office function of an investment adviser or portfolio operations team, as opposed to the front office?

Reconciling holdings and cash records with custodian statements is a back-office activity. The back office supports operations through settlement, record keeping and checks, whereas meeting clients, deciding allocations and dealing in the market are front-office tasks.

  1. AReconciliation of holdings and cash records with custodian statementsCorrect
  2. BMeeting prospects to understand their risk appetite
  3. CDeciding the asset allocation recommended to a client
  4. DExecuting a buy decision on the trading desk

Explanation

Back office handles confirmation, settlement, record keeping and reconciliation with custodians. Client meetings, asset allocation decisions and trade execution are front-office activities involving clients or market dealing.

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