Process for risk profiling of the client and for assessing suitability of advice

For giving Investment advice to our clients, we are managing a comprehensive risk profiling of our clients and we obtain from the client, such information as is necessary for the purpose of giving investment advice on time to time basis, including the following:


Age of the client:

In our risk profiling we gather the information about age group of the client


Investment objectives including time for which they wish to stay invested;

Whether they want to invest in short time horizon which involve risk or wants to have long term investment.


The purposes of the investment;

Whether they want to invest for their capital appreciation or for saving for a long-term goal or for short term speculation and what are his or her priorities.


Income details of client:

We obtain information about what is the source of Income of the client and what is his/her annual income, expenses of the client and Fund that can be save for future investment.


We obtain information about their existing investments/assets, whether it requires diversifying their investments Risk- In trading or investment, risk stands for “the loss of capital”. We assume that if a client opens a demat account then he understands the investment in stock market is subject to market risk and he/she is ready to take at least the smaller risk and comes default in low risk category.


Risk appetite/ tolerance;

On the basis of discussion with the client & analyzing their current assets and their current liabilities we decide the Risk appetite of the client and tolerance level of the client.


Liability/borrowing details;

We obtain the necessary information about their current liabilities and borrowing from Banks or from financial institutions or from any other means of finance to access their tolerance level.


Process for assessing the risk a client is willing and able to take:

On the basis of questionnaire, we give marks to the client between 1 to 30 and on the basis of marks we determine the risk category of Client


On the basis of risk category, we have four categories of clients


1.   Very High Risk – This option is for aggressive traders who are willing to take very high risk in the stock and commodity market. Example: Option writing which has limited profit and unlimited risk and also positional future which carry higher risk of gap up or gap down market opening as well as global risk.


2.  High Risk- This option is for less aggressive trader who is ready to bear high risk with high return in financial market. Example: Option trading (Buy Side), Intraday trading (both equity & future)


3.  Moderate Risk- This option is for those traders who are not ready to take higher risk in the financial market.


4.   Low Risk- This category is for novice trader who does not have any capacity to take risk and want safe investment heaven. This product is also for learner who wants to take practical exposure in the financial market. Example: Bank FD, Post office scheme, Equity trading (least quantity).


Product Suitability Table:



Risk Score

Product Suitability

Very High Risk


Option writing, FX, Illiquid Stock/Stock Options, Stock Category From D to Z, Category include High, moderate and low risk

High Risk


Intraday cash & future. Positional Future, Leverage Trading, Delivery Trading, Naked Option (Buy Side), MCX Trading, Category include moderate & low risk

Moderate Risk


Intraday Cash , Delivery Trading & option strategies, category include low risk

Low Risk


Pure cash trading (least quantity), Delivery trading (least quantity), option strategy, Bank FD, Post office scheme




Risk assessment is done based on the information provided by the client to the IA. The IA does not cross-check the information and believes the information provided by the client.