# 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.

<!--
Guidance: How to use this template
- Complete this profile before any personal recommendation or any
  discretionary portfolio management decision. Under Delegated
  Regulation (EU) 2017/565 Article 54(8), a firm that does not obtain
  the information it needs must not recommend or manage. The profile is
  therefore a gate, not paperwork.
- Work in the order of the sections. Ask about objectives, horizon and
  circumstances first and about sustainability preferences after them:
  the recitals of Delegated Regulation (EU) 2021/1253 and ESMA35-43-3172
  expect the firm to assess sustainability preferences once the other
  investment objectives are known.
- The profile feeds the MiFID Suitability Report
  (`compliance/mifid-suitability-report`) and the Investment Policy
  Statement for an individual (`finance/investment-policy-statement-individual`).
  Periodic reviews are recorded in the Client Portfolio Review
  (`finance/client-portfolio-review`). Product-side checks belong in the
  MiFID Target Market Assessment (`compliance/mifid-target-market-assessment`).
- Keep the questionnaire wording, scoring bands and model mapping in a
  controlled methodology owned by the firm. The scores in this template
  are examples, not normative thresholds.
- Treat the completed profile as personal data: restrict access, record
  the lawful basis in the firm's processing records and keep it for the
  retention period set by local record-keeping rules.
-->

## Document control

<!-- Guidance: Identify the client, the firm, the adviser and the service. A material change in circumstances creates a new version, not an overwrite, so the record shows what the firm knew at each decision. -->

| Field | Value |
|---|---|
| Document ID | [CRP-YYYY-NNN] |
| Version | [1.0] |
| Status | [Draft / Client confirmed / Approved / Superseded] |
| Owner | [@adviser] |
| Approvers/reviewers | [@supervisor], [@compliance-reviewer] |
| Last updated | YYYY-MM-DD |
| Classification | Confidential: client personal data |
| Firm | [Firm legal name, licence or registration number] |
| Client reference | [Client or account number] |
| Service covered | [Investment advice / Discretionary portfolio management / Brokerage with recommendations] |
| Methodology version | [Risk profiling methodology ID and version] |
| Next scheduled review | YYYY-MM-DD |
| Related documents | [Suitability report ID], [IPS ID], [Engagement agreement ID] |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Adviser who completed the profile | [Name] | [Completed] | YYYY-MM-DD |
| Supervisor or four-eyes reviewer | [Name] | [Approved / Returned] | YYYY-MM-DD |
| Client (each account holder) | [Name] | [Confirmed accurate] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@adviser] | First draft from the onboarding meeting |
| 1.0 | YYYY-MM-DD | [@adviser] | Client confirmed; supervisor approved |
| [1.1] | YYYY-MM-DD | [@adviser] | [Annual review or change in circumstances: describe] |

## Contents

1. [Client identification and classification](#1-client-identification-and-classification)
2. [Financial situation](#2-financial-situation)
3. [Investment objectives and time horizon](#3-investment-objectives-and-time-horizon)
4. [Knowledge and experience](#4-knowledge-and-experience)
5. [Risk tolerance and capacity for loss](#5-risk-tolerance-and-capacity-for-loss)
6. [Sustainability preferences](#6-sustainability-preferences)
7. [Liquidity needs and constraints](#7-liquidity-needs-and-constraints)
8. [Vulnerability and support needs](#8-vulnerability-and-support-needs)
9. [Resulting profile and model portfolio mapping](#9-resulting-profile-and-model-portfolio-mapping)
10. [Inconsistencies and how they were resolved](#10-inconsistencies-and-how-they-were-resolved)
11. [Review, confirmation and record keeping](#11-review-confirmation-and-record-keeping)
12. [Jurisdiction notes](#12-jurisdiction-notes)
13. [Glossary and references](#13-glossary-and-references)
14. [Standard and licence note](#standard-and-licence-note)

## 1. Client identification and classification

<!-- Guidance: Record who the client is, who decides and who is assessed. For joint accounts, trusts, companies and represented persons, state whose financial situation and objectives count and whose knowledge counts. Pitfall: profiling only the person who attends the meeting when the account belongs to two people. -->

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.

| Field | Holder 1 | Holder 2 |
|---|---|---|
| Full name | [Name] | [Name] |
| Date of birth and age | YYYY-MM-DD ([age]) | YYYY-MM-DD ([age]) |
| Tax residence | [Country] | [Country] |
| Citizenship(s) | [Country] | [Country] |
| Employment status and occupation | [Status, role] | [Status, role] |
| Dependants | [Number, ages] | [Number, ages] |
| Identity verified (KYC file reference) | [KYC-ID] | [KYC-ID] |
| Trusted contact person (where offered) | [Name, relationship] | [Name, relationship] |

| Item | Value | Notes |
|---|---|---|
| Account type | [Individual / Joint / Trust / Company / Power of attorney] | |
| Client category | [Retail / Professional (per se or on request) / Eligible counterparty] | MiFID II Annex II and Article 30; retail gives the highest protection |
| Person(s) whose financial situation and objectives are assessed | [Names] | Policy under Article 54(6) |
| Person(s) whose knowledge and experience are assessed | [Names] | Usually the decision maker |
| Decision rule for joint accounts | [Lower of the two risk scores / Agreed joint answers / Other] | State the firm policy reference |
| Communication preferences and language | [Language, format, durable medium] | |

*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

<!-- Guidance: Capture income, assets (liquid, invested, property), liabilities and regular commitments as Article 54(4) of Delegated Regulation 2017/565 lists them. Ask for evidence where the amounts drive the recommendation. Pitfall: recording gross salary but not the regular commitments that absorb it. -->

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)

| Line | Amount | Source and evidence |
|---|---|---|
| Net employment income, holder 1 | [amount] | [Payslip / declared] |
| Net employment income, holder 2 | [amount] | [Payslip / declared] |
| Other income (rental, pension, benefits) | [amount] | [Source] |
| **Total net income** | [amount] | |
| Essential expenditure (housing, food, utilities, insurance, childcare, loan repayments) | [amount] | [Budget / bank statements] |
| Discretionary expenditure | [amount] | |
| **Monthly surplus available to save** | [amount] | Net income minus all expenditure |

*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

| ID | Item | Owner | Value | Liquidity | Notes |
|---|---|---|---|---|---|
| FS-A-001 *(Example)* | Current and savings accounts | Joint | 38,000 | Same day | Emergency reserve |
| FS-A-002 *(Example)* | Existing investment account at another provider | Joint | 200,000 | 2 to 5 days | To be transferred into the managed mandate |
| FS-A-003 *(Example)* | Employer pension plans | Each holder | 185,000 | Locked until retirement age | Not in scope of the mandate; considered for capacity |
| FS-A-004 *(Example)* | Employer shares held by holder 2 | Holder 2 | 40,000 | Restricted trading windows | Outside the mandate; concentration noted in section 7 |
| FS-A-005 *(Example)* | Family home | Joint | 520,000 | Illiquid | Valuation basis: recent comparable sales |
| FS-L-001 *(Example)* | Mortgage | Joint | 310,000 | 21 years left, fixed rate until 2031 | Payment included in essential expenditure |

*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

| Indicator | Formula | *Example* value |
|---|---|---|
| Emergency reserve cover | Liquid savings divided by essential monthly expenditure | 38,000 / 5,200 = 7.3 months |
| Debt service ratio | Monthly debt payments divided by net monthly income | 1,450 / 9,100 = 15.9% |
| Share of net worth in the proposed mandate | Mandate amount divided by net worth | 200,000 / 673,000 = 29.7% |
| Expected large outflows in the next 5 years | Listed amounts and dates | Car replacement 25,000 in 2028 from savings |

## 3. Investment objectives and time horizon

<!-- Guidance: Write each objective as a goal with an amount, a date and a priority. Record how long the client intends to hold the investment, the purpose, and the preferences on risk taking as Article 54(5) lists them. Pitfall: a single vague objective such as "growth" that cannot be tested at review. -->

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.

| ID | Goal | Target amount (today's money) | Target date | Priority | Horizon | Funding source |
|---|---|---|---|---|---|---|
| OBJ-001 *(Example)* | Supplement retirement income from age 62 (holder 1) and 60 (holder 2) | Pot of 590,000 nominal at year 16 | 2042 | Essential | 16 years, then drawdown | 160,000 sleeve plus 1,200 a month |
| OBJ-002 *(Example)* | University costs for two children | 66,000 nominal | 2032 | Important | 6 years | 40,000 sleeve plus 300 a month |
| OBJ-003 *(Example)* | Help with first home deposit for children | No fixed amount | After 2040 | Aspirational | 15 years or more | Surplus from OBJ-001 if any |
| [OBJ-NNN] | [Goal] | [Amount] | YYYY | [Essential / Important / Aspirational] | [Years] | [Source] |

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

<!-- Guidance: Assess knowledge and experience for each product type the service may use, as Article 55(1) lists: types of service and instrument known, nature, volume and frequency of past transactions and the period, and education and profession. Do not let self-assessment alone decide. Pitfall: a professional profession treated as product knowledge for unrelated products. -->

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)).

| Product family | Holder 1: experience (years, frequency, volume) | Holder 1: knowledge check | Holder 2: experience | Holder 2: knowledge check | Outcome |
|---|---|---|---|---|---|
| Deposits and money market funds | [Detail] | [Pass / Fail] | [Detail] | [Pass / Fail] | [Eligible / Not eligible / Eligible after explanation] |
| Collective investment funds and ETFs (equity, bond, multi-asset) | *Example*: 12 years, monthly purchases, about 30 trades a year | Pass 3/3 | *Example*: 5 years, savings plan only | Pass 2/3, explained tracking error | Eligible |
| Individual listed shares | *Example*: 8 years, about 10 trades a year | Pass 3/3 | *Example*: employer shares only | Pass 2/3 | Eligible |
| Individual bonds | *Example*: none | Pass 2/3 | *Example*: none | Fail 1/3 | Eligible in funds only |
| Structured products | [Detail] | [Result] | [Detail] | [Result] | *Example*: Not eligible |
| Derivatives and leveraged products | *Example*: none | Not tested | *Example*: none | Not tested | Not eligible |
| Private markets and illiquid funds | *Example*: none | Not tested | *Example*: none | Not tested | Not eligible |
| Crypto-assets | [Detail] | [Result] | [Detail] | [Result] | [Outcome] |

| Field | Holder 1 | Holder 2 |
|---|---|---|
| Highest education level and field | [Detail] | [Detail] |
| Profession or former profession relevant to finance | [Detail] | [Detail] |
| Training or explanation given in this meeting | [Topics] | [Topics] |

## 5. Risk tolerance and capacity for loss

<!-- Guidance: Separate the two concepts. Risk tolerance is willingness: how much fluctuation the client is prepared to accept. Capacity for loss is ability: how much the client can lose without harming essential goals or standard of living. The profile is the lower of the two. Pitfall: a high questionnaire score overriding a low 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.

| ID | Theme | Holder 1 answer | Score (1 to 5) | Holder 2 answer | Score (1 to 5) |
|---|---|---|---|---|---|
| RTQ-01 | Reaction to a 20% fall in portfolio value within a year | *Example*: hold and wait | 4 | *Example*: sell part | 2 |
| RTQ-02 | Preference between a stable low return and a variable higher return | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-03 | Past behaviour in a real market fall | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-04 | Importance of avoiding any loss over the horizon | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-05 | Self-assessed comfort with investment risk compared with peers | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-06 | Choice among illustrated ranges of one-year outcomes | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-07 | Time needed to recover from a loss before it changes plans | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-08 | Attitude to borrowing to invest | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-09 | How often the client expects to check the portfolio | [Answer] | [Score] | [Answer] | [Score] |
| RTQ-10 | Reaction to underperforming a reference index for two years | [Answer] | [Score] | [Answer] | [Score] |
| | **Total (10 to 50)** | | *Example*: 34 | | *Example*: 29 |

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

| Total score | Tolerance band |
|---|---|
| 10 to 17 | 1 Defensive |
| 18 to 25 | 2 Cautious |
| 26 to 33 | 3 Balanced |
| 34 to 41 | 4 Growth |
| 42 to 50 | 5 Adventurous |

*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.

| Question | *Example* answer |
|---|---|
| Is the emergency reserve held outside the mandate and sufficient? | Yes: 7.3 months of essential spending |
| Are there other assets that secure essential goals? | Employer pensions (185,000) secure a base retirement income |
| Will any part of the mandate be withdrawn within 3 years? | No; education withdrawals start in 2032 |
| Could income continue if one holder lost their job? | Yes for 12 months on one income with the surplus reduced to zero |
| Largest absorbable fall in value of the mandate | 50,000 (25% of 200,000) |
| Capacity for loss rating | Medium |

### 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.

| Candidate band | Model stress loss (*Example*) | Loss on 200,000 | Within capacity of 50,000? |
|---|---|---|---|
| 3 Balanced | 20% | 40,000 | Yes |
| 4 Growth | 28% | 56,000 | No |

$$
\text{Profile} = \min\left(\text{Tolerance band},\ \text{Capacity band}\right)
$$

*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

<!-- Guidance: Ask after the other objectives. Record the client's choice on the three elements defined in Article 2(7) of Delegated Regulation 2017/565: a minimum proportion of taxonomy-aligned investments, a minimum proportion of sustainable investments under SFDR, and consideration of principal adverse impacts. "No preference" is a valid answer and must be recorded as such. Pitfall: recording general interest in ESG without the minimum proportions and PAI choices the product match needs. -->

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.

| Element | Definition in plain language | Client choice | Minimum proportion or detail |
|---|---|---|---|
| (a) Taxonomy alignment | Share invested in activities that qualify as environmentally sustainable under Regulation (EU) 2020/852 | *Example*: no minimum | [%] |
| (b) Sustainable investments | Share invested in sustainable investments as defined in Regulation (EU) 2019/2088 (SFDR) Article 2(17) | *Example*: yes | *Example*: at least 20% of the portfolio |
| (c) Principal adverse impacts (PAI) | The product considers specified negative effects on sustainability factors | *Example*: yes | *Example*: greenhouse gas emissions; exposure to controversial weapons |
| Exclusions requested outside the three elements | Ethical or religious exclusions the client wants | [Detail] | [Detail] |
| Willing to adapt preferences if no match | | [Yes / No] | Record the decision and reasons if it happens |

## 7. Liquidity needs and constraints

<!-- Guidance: Record cash needs, withdrawals, legal or tax constraints and unique circumstances such as concentrated holdings or restricted shares. Pitfall: forgetting that employer shares or a pending inheritance change the real risk of the household. -->

| ID | Constraint | Detail | Effect on the mandate |
|---|---|---|---|
| CON-001 *(Example)* | Planned withdrawals | Education: about 11,000 a year from 2032 to 2037 | Hold the education sleeve in a separate, more cautious allocation |
| CON-002 *(Example)* | Concentration | 40,000 in employer shares held outside the mandate (about 17% of the 240,000 invested outside pensions: 200,000 mandate plus 40,000 shares) | Underweight the employer's sector in the mandate; review a selling plan in the trading windows |
| CON-003 *(Example)* | Tax | Capital gains realised on transfer of the existing account | Transfer in kind where possible; [tax adviser] to confirm |
| CON-004 *(Example)* | Legal and regulatory | Holder 2 is on the employer's insider list | Employer shares excluded from the mandate; outside holdings sold only in open trading windows |
| CON-005 | Unique circumstances | [Expected inheritance, business sale, divorce, emigration] | [Effect] |

## 8. Vulnerability and support needs

<!-- Guidance: Record indicators of vulnerability and the adjustments the firm will make, with the client's consent where health data is involved. Use only what is needed and store it with restricted access. Pitfall: treating vulnerability as a reason to refuse service rather than to adapt it. -->

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.

| Driver | Indicator observed | Adjustment agreed | Consent recorded |
|---|---|---|---|
| Health | [None observed / Detail] | [Large print, extra time, trusted contact] | [Yes / No / Not applicable] |
| Life events | *Example*: none observed | | |
| Resilience | *Example*: none observed (reserve 7.3 months) | | |
| Capability | *Example*: holder 2 asked for written summaries before meetings | Send summary two days before each review | Yes |

## 9. Resulting profile and model portfolio mapping

<!-- Guidance: State the final profile per sleeve or per account and the model portfolio that implements it. Explain in two or three sentences why the profile is right, linking to the evidence above. Pitfall: mapping a profile to a model without checking the model against the capacity for loss and the knowledge outcome. -->

| Profile band | *Example* model | Growth assets | Defensive assets | Illustrative stress loss | Eligible products |
|---|---|---|---|---|---|
| 1 Defensive | Model D | 0 to 20% | 80 to 100% | 7% | Deposits, money market and short bond funds |
| 2 Cautious | Model C | 20 to 40% | 60 to 80% | 12% | Plus diversified bond and multi-asset funds |
| 3 Balanced | Model B | 40 to 60% | 40 to 60% | 20% | Plus equity funds and ETFs, listed shares |
| 4 Growth | Model G | 60 to 80% | 20 to 40% | 28% | As Balanced, higher equity |
| 5 Adventurous | Model A | 80 to 100% | 0 to 20% | 35% | As Growth, may add specialist funds if knowledge allows |

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.

| Sleeve | Amount | Profile | Model | Rationale |
|---|---|---|---|---|
| Retirement (OBJ-001) *(Example)* | 160,000 | 3 Balanced | Model B | Lower of tolerance bands; Growth fails the capacity test; 16-year horizon |
| Education (OBJ-002) *(Example)* | 40,000 | 2 Cautious | Model C | 6-year horizon, important goal, withdrawals from 2032 |
| **Total mandate** | **200,000** | | | |

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

<!-- Guidance: Look for contradictions between answers, and between answers and facts. Article 54(7)(d) expects the firm to check consistency. Record each one and the outcome. Pitfall: averaging away a contradiction instead of discussing it with the client. -->

| ID | Inconsistency | How it was found | Resolution | Date |
|---|---|---|---|---|
| INC-001 *(Example)* | Holder 1 chose "hold and wait" after a 20% fall but sold most equity funds in a 2022 market fall | Transaction history review | Discussed; client explained a house purchase at that time; answer kept, note added | YYYY-MM-DD |
| INC-002 *(Example)* | Growth band preferred by holder 1 versus capacity for loss of 25% | Section 5.3 test | Balanced applied; client informed in writing | YYYY-MM-DD |
| INC-003 *(Example)* | Expected return of "about 8% a year" versus Balanced model assumptions | Objectives discussion | Expectation reset with scenario ranges; recorded in IPS | YYYY-MM-DD |
| [INC-NNN] | [Detail] | [Source] | [Resolution] | YYYY-MM-DD |

## 11. Review, confirmation and record keeping

<!-- Guidance: Set the review frequency and the events that trigger an earlier review. Have each holder confirm the information. Pitfall: an annual review that only asks "anything changed?" without refreshing the financial data. -->

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.

| Item | Value |
|---|---|
| Scheduled review frequency | [Annual / Semi-annual] |
| Event triggers for an earlier review | Change of job or income; birth, death, marriage or divorce; inheritance; withdrawal above [amount]; change of tax residence; new health issue; client request |
| Information refresh method | [Meeting / Secure form / Video call] |
| Records retained | This profile, questionnaire answers, evidence, knowledge checks, inconsistency log, client confirmations |
| Retention period | [Years, per local record-keeping rules] |

### 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.

| Holder | Signature or electronic confirmation | Date |
|---|---|---|
| [Name] | [Signature] | YYYY-MM-DD |
| [Name] | [Signature] | YYYY-MM-DD |

### 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.

| Adviser | Signature | Date |
|---|---|---|
| [Name] | [Signature] | YYYY-MM-DD |

## 12. Jurisdiction notes

<!-- Guidance: Keep the profile structure the same across countries and add local items here. Check the current rules before use; the table is a pointer, not a summary of the law. Pitfall: using an EU profile unchanged for a US broker-dealer customer. -->

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

| Jurisdiction | Legal basis (names and numbers) | Local items to add |
|---|---|---|
| EU | MiFID II Article 25(2); Delegated Regulation (EU) 2017/565 Articles 2(7), 54, 55 (as amended by 2021/1253); ESMA35-43-3172 | Sustainability preferences; professional client opt-up procedure; national language and record rules. The Retail Investment Strategy amendments were not yet in force at 2026-10 |
| United States, broker-dealers | Regulation Best Interest, 17 CFR 240.15l-1 (care obligation and the retail customer investment profile in paragraph (b)(2)); FINRA Rules 2090 and 2111 (by number); FINRA Rule 4512 trusted contact (by number) | Age, other investments, tax status and the other profile items the rule lists; Form CRS delivery |
| United States, investment advisers | Advisers Act fiduciary duty as interpreted in SEC Release IA-5248 (2019-06-05) | Reasonable inquiry into financial situation, experience and objectives; update as circumstances change |
| United Kingdom | FCA COBS 9A (suitability), PRIN 2A Consumer Duty, FG21/1 vulnerable customers (by reference) | Consumer Duty outcomes; targeted support regime from 2026-04-06 is separate from advice |
| [Other] | [Law or rule] | [Items] |

## 13. Glossary and references

<!-- Guidance: Keep definitions short and in plain language so the client can read the profile. Pitfall: undefined jargon in a document the client signs. -->

### Glossary

| Term | Meaning in this template |
|---|---|
| Capacity for loss | The fall in value a client can absorb without harming essential goals or standard of living |
| Risk tolerance | The client's willingness to accept fluctuations and losses in pursuit of return |
| Risk profile | The resulting band used to select a model portfolio; the lower of tolerance and capacity |
| Retail client | A client that is neither a professional client nor an eligible counterparty under MiFID II; highest protection |
| Sustainability preferences | The client's choices on taxonomy alignment, sustainable investments and principal adverse impacts, as defined in Delegated Regulation 2017/565 Article 2(7) |
| Principal adverse impacts (PAI) | Significant negative effects of investment decisions on environmental, social and governance factors |
| Stress loss | An illustrative fall in value of a model portfolio under a defined adverse scenario |
| Durable medium | A format that lets the client store and reproduce information unchanged, such as a PDF |

### References

| Source | Version or date | Use in this template |
|---|---|---|
| Directive 2014/65/EU (MiFID II) | OJ L 173, 12.6.2014; check the consolidated text | Article 24 best interest, Article 25(2) suitability |
| Commission Delegated Regulation (EU) 2017/565 | OJ L 87, 31.3.2017; consolidated text | Articles 54 and 55 information and process |
| Commission Delegated Regulation (EU) 2021/1253 | Adopted 2021-04-21, applies from 2022-08-02 | Sustainability preferences, Article 2(7), amended Article 54 |
| ESMA Guidelines on certain aspects of the MiFID II suitability requirements | ESMA35-43-3172, applied from 2023-10-03 | Supervisory expectations (cited, not reproduced) |
| SEC Regulation Best Interest | 17 CFR 240.15l-1, 84 FR 33318 (2019-07-12) | US broker-dealer customer profile |
| SEC Commission Interpretation Regarding Standard of Conduct for Investment Advisers | Release IA-5248, 2019-06-05 | US adviser duty of care |
| FINRA Rules 2090, 2111, 4512 | Cited by number only | US broker-dealer know-your-customer and suitability |
| FCA COBS 9A, PRIN 2A, FG21/1 | Cited by reference only | UK suitability, Consumer Duty, vulnerability |

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.