A mutual funds advisor must use due diligence to learn essential facts relevant to every client and order, including income and net worth, family commitments, and goals. This is known as?

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Multiple Choice

A mutual funds advisor must use due diligence to learn essential facts relevant to every client and order, including income and net worth, family commitments, and goals. This is known as?

Know Your Client is the practice of gathering essential facts about a client and their orders—income, net worth, family commitments, goals, and related aspects like risk tolerance and time horizon—so that the advisor’s recommendations fit the client’s financial situation and objectives. This due diligence supports suitability, helping to tailor portfolios and avoid recommending inappropriate products. Compliance refers to meeting regulatory requirements overall; Disclosure involves informing clients about fees, conflicts of interest, and material information; a Financial Planner is a professional who develops financial plans. So the process described is Know Your Client.

Know Your Client is the practice of gathering essential facts about a client and their orders—income, net worth, family commitments, goals, and related aspects like risk tolerance and time horizon—so that the advisor’s recommendations fit the client’s financial situation and objectives. This due diligence supports suitability, helping to tailor portfolios and avoid recommending inappropriate products. Compliance refers to meeting regulatory requirements overall; Disclosure involves informing clients about fees, conflicts of interest, and material information; a Financial Planner is a professional who develops financial plans. So the process described is Know Your Client.

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