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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Case Studies in Comprehensive Financial Advice

While preparing a comprehensive financial plan for a client, an investment adviser should ideally begin with which of the following steps?

An adviser should begin by gathering client data and understanding goals, risk profile and the existing financial position. Only after this analysis can a suitable plan and products be recommended; suggesting schemes first ignores the client's needs and breaches suitability requirements.

  1. ARecommending specific mutual fund schemes
  2. BGathering client data and understanding goals, risk profile and existing financial positionCorrect
  3. CSelecting an insurance company for the client
  4. DPreparing the tax return of the client

Explanation

The financial planning process starts with establishing the engagement and gathering information about the client's goals, finances and risk profile. Product recommendations come only after analysing this information. Recommending schemes first would be unsuitable advice.

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