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

Which of the following is a regulatory expectation of an investment adviser regarding risk profiling under the SEBI (Investment Advisers) Regulations, 2013?

The adviser must obtain relevant information from the client, assess and document the client's risk profile, and ensure that advice given is suitable to that profile. Profiling cannot be skipped, made without client input, or left undocumented.

  1. ARisk profiling is optional if the client is an existing investor
  2. BThe adviser must obtain information and assess the client's risk profile, and ensure advice is suitable to itCorrect
  3. CThe risk profile can be decided by the adviser without client inputs
  4. DThe risk profile need not be documented if advice is given orally

Explanation

The regulations require advisers to profile the client's risk based on information obtained, and to give advice that is suitable to that profile. It cannot be skipped for existing clients, set without client inputs, or left undocumented.

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