Client Risk Profile Template (MiFID II Suitability, Reg BI)

Client Risk Profile: [Client or household name]

Fact-find and risk profiling record for an individual, joint or represented client of an investment adviser, wealth manager or portfolio manager. It captures the information that a suitability assessment needs: client classification, financial situation, investment objectives and time horizon, knowledge and experience, risk tolerance and capacity for loss, sustainability preferences, liquidity needs and vulnerability indicators, and it ends with a resulting risk profile mapped to a model portfolio. Based on MiFID II (Directive 2014/65/EU) Article 25(2), Commission Delegated Regulation (EU) 2017/565 Articles 54 and 55 as amended by Delegated Regulation (EU) 2021/1253 (sustainability preferences, applying from 2022-08-02), the ESMA Guidelines on certain aspects of the MiFID II suitability requirements (ESMA35-43-3172) and, for US firms, the retail customer investment profile in SEC Regulation Best Interest (17 CFR 240.15l-1). Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax or legal advice. Obtain the regulation or rule for the normative text.

Document control

Approvals

Revision history

Contents

1. Client identification and classification
2. Financial situation
3. Investment objectives and time horizon
4. Knowledge and experience
5. Risk tolerance and capacity for loss
6. Sustainability preferences
7. Liquidity needs and constraints
8. Vulnerability and support needs
9. Resulting profile and model portfolio mapping
10. Inconsistencies and how they were resolved
11. Review, confirmation and record keeping
12. Jurisdiction notes
13. Glossary and references
14. Standard and licence note

1. Client identification and classification

Identify every person on the account and the role each plays. A profile that covers a household must still record each holder, because knowledge, experience and attitude to risk differ between people even when the money is shared. Delegated Regulation (EU) 2017/565 Article 54(6) requires the firm to have a recorded policy for groups of persons, legal persons and represented clients: the financial situation and objectives are those of the underlying client, while knowledge and experience are those of the representative who makes the decisions.

Example: Mara Lind (46, software engineer) and Theo Lind (44, quality manager at a listed pharmaceutical company), married, two children aged 12 and 9, tax resident in [EU Member State], joint discretionary account with Kestrel Bay Capital Europe, a fictional MiFID investment firm. Both holders are classified as retail clients. The firm policy applies the lower of the two risk tolerance scores to a joint account and assesses knowledge and experience for both holders because either may give instructions.

2. Financial situation

Record the source and amount of regular income, all assets including liquid assets, investments and real property, all liabilities and the regular financial commitments. State the currency, the valuation date and whether each figure was evidenced or declared. Amounts below are in [currency]; the Example uses EUR and a valuation date of 2026-09-30.

2.1 Income and expenditure (monthly)

Example (EUR per month): net income 9,100; essential expenditure 5,200 (including the mortgage payment); discretionary expenditure 1,600; surplus 2,300, of which the clients commit 1,500 to the managed account and keep 800 as a buffer.

2.2 Assets and liabilities

Example net worth: assets 38,000 + 200,000 + 185,000 + 40,000 + 520,000 = 983,000; liabilities 310,000; net worth 673,000 (EUR).

2.3 Financial resilience indicators

3. Investment objectives and time horizon

List each purpose the money serves. Rank the goals so that the portfolio can be split or sequenced when goals compete, and so that a review can test whether the portfolio still serves them.

Record also:

• the intended holding period for the whole mandate and any date when a large part will be withdrawn;
• whether the client needs regular income from the portfolio, and how much;
• the expected return the client has in mind, so that unrealistic expectations are discussed now and not at the first loss;
• whether the money is the client's main or only long-term savings.

4. Knowledge and experience

Ask factual questions, not only self-ratings. A short knowledge check with two or three questions per product family is more reliable than asking the client whether they "understand" a product. Record the evidence and the outcome per product family. The firm must not discourage the client from giving this information (Article 55(2)) and may rely on what the client says unless it knows, or should know, that it is manifestly out of date, inaccurate or incomplete (Article 55(3)).

5. Risk tolerance and capacity for loss

5.1 Risk tolerance questionnaire

Use the firm's validated questionnaire. Record each answer and its score so that a reviewer can reproduce the result. Describe the scoring bands in the methodology document and reference its version in Document control. The questions below show the themes a questionnaire usually covers; write your own wording and test it with clients for clarity, as Article 54(7)(b) and (c) expect tools and questions to be fit for purpose and understood.

Example scoring bands (illustrative only, set your own in the methodology):

Example result: holder 1 scores 34 (band 4, Growth), holder 2 scores 29 (band 3, Balanced). Under the firm policy for joint accounts the lower band applies: Balanced (3) for the joint account.

5.2 Capacity for loss

State the largest fall in the value of the mandate the client could absorb without changing an essential goal, cutting essential spending or taking on debt. Base it on the financial situation in section 2, not on the questionnaire.

5.3 Combined risk rating

The overall profile is the lower of the willingness band and the band that the capacity for loss supports. Test each candidate band against the capacity with a stress loss for the model that the band maps to (section 9). A stress loss is an illustrative fall, set in the firm methodology from historical or hypothetical scenarios.

Example combined rating: Balanced (3) for the retirement sleeve. The education sleeve has a 6-year horizon with an important goal, so the adviser applies Cautious (2) to that sleeve (see section 9).

6. Sustainability preferences

Explain the three elements in plain language before asking. Record a minimum proportion or a choice for each element, and whether the client is willing to adapt the preferences if no product meets them. Article 54(10), as amended by Delegated Regulation (EU) 2021/1253, and ESMA35-43-3172 expect the firm not to present a product as meeting the preferences when it does not, and to keep a record of the explanation and of any decision by the client to adapt them.

7. Liquidity needs and constraints

8. Vulnerability and support needs

A client in a vulnerable situation may be less able to protect their own interests. Record indicators and the support the firm will give; do not record diagnoses unless they are needed and consented to. The UK FCA guidance FG21/1 on the fair treatment of vulnerable customers names four drivers (health, life events, resilience and capability); other jurisdictions use similar concepts under their conduct rules.

9. Resulting profile and model portfolio mapping

The bands are contiguous, so every portfolio maps to one band; a portfolio exactly on a boundary takes the lower band. The model ranges and stress losses above are examples. Use the firm's approved models and their current documentation.

Sustainability filter: both sleeves use model variants with at least 20% sustainable investments and PAI consideration on greenhouse gas emissions and controversial weapons (Example). Product eligibility: funds, ETFs and listed shares only; no structured products, derivatives or illiquid funds (section 4).

The selected models and products are recorded in the suitability report and the investment policy statement, which explain why the recommendation is suitable. This profile does not make that recommendation itself.

10. Inconsistencies and how they were resolved

11. Review, confirmation and record keeping

Firms that provide a periodic suitability assessment review the suitability of their recommendations at least annually, and more often where the client's risk profile or the instruments call for it (Delegated Regulation 2017/565 Article 54(13)). Firms with an ongoing relationship need procedures to keep client information adequate and up to date (Article 54(7)). Set the review cycle accordingly.

Supervisor checks and common errors

The four-eyes reviewer should be able to rebuild the result from the record alone. Check first that every figure used later (net worth, surplus, reserve months, capacity for loss) is computed from the section 2 tables and that the dates agree. Then check that the questionnaire totals add up, that the band follows from the published scoring table, that the joint-account rule was applied as the firm policy states, and that the capacity test in section 5.3 used the stress loss of the model actually proposed. Finally, read the inconsistency log: an empty log on a profile with two holders whose answers differ is itself a warning sign.

The errors found most often in file reviews are: income recorded but regular commitments left out, so the surplus is overstated; assets held outside the firm ignored, so a concentration such as employer shares is missed; a capacity for loss written as a word ("medium") with no amount behind it; knowledge assessed only by self-rating; sustainability preferences recorded as "interested in ESG" with no minimum proportions; vulnerability noted in a meeting but not turned into an agreed adjustment; and a profile that is never refreshed although the client changed job, moved country or received an inheritance. Return a profile with any of these errors to the adviser before a recommendation is made, and record the return in the approvals table.

Client confirmation

I/we confirm that the information in this profile is accurate and complete to the best of my/our knowledge. I/we understand that the firm relies on it to assess suitability, that incomplete or inaccurate information may lead to unsuitable recommendations, and that I/we should tell the firm promptly about any material change.

Adviser declaration

I have explained the purpose of this assessment to the client, which is to enable the firm to act in the client's best interest, and I have checked the answers for consistency.

12. Jurisdiction notes

Status as of 2026-10. Check local law and the current consolidated texts.

13. Glossary and references

Glossary

References

Related templates: MiFID Suitability Report (compliance/mifid-suitability-report), Investment Policy Statement for an individual (finance/investment-policy-statement-individual), Client Portfolio Review (finance/client-portfolio-review), Financial Plan (personal/financial-plan), Net Worth Statement (personal/net-worth-statement), Conflicts of Interest Register (compliance/conflicts-of-interest-register).

Standard and licence note

Based on Directive 2014/65/EU (MiFID II), Commission Delegated Regulation (EU) 2017/565 as amended by Delegated Regulation (EU) 2021/1253, and SEC Regulation Best Interest (17 CFR 240.15l-1), with reference to the ESMA suitability guidelines ESMA35-43-3172. EU legislation is reused with acknowledgement of EUR-Lex as the source; US federal rules are public domain. ESMA does not endorse this template. FINRA rules and FCA Handbook provisions are cited by number only and no text from them is used. Article and rule numbers are cited and requirements are described in original wording; the text, questionnaire themes, scoring bands, models and examples are original and fictional. Check the current consolidated texts and any amendments, including the pending EU Retail Investment Strategy, before use. This is a document format, not financial, investment, tax or legal advice. Template licence: MIT.