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CLIENT GOALS & CONSTRAINTS PART II AND CLIENT EDUCATION
What is a client's 'risk capacity' as distinct from 'risk tolerance' in wealth management?
Risk capacity is the objective financial ability to absorb losses without jeopardising goals, whereas risk tolerance is the subjective psychological willingness to accept volatility. Both must be assessed together before recommending a portfolio.
What is a 'return objective' in an Investment Policy Statement (IPS)?
Target rate of return needed to meet client goals
Which SEBI regulation mandates that investment advisers assess the client's financial situation before providing advice?
SEBI (Investment Advisers) Regulations, 2013 require advisers to conduct a suitability assessment covering income, net worth, investment horizon, and risk profile before giving any advice.
What is 'goal prioritization' in personal financial planning?
Ranking goals by importance and urgency for resource allocation
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