Risk Profiling & Suitability Policy
Money Yatra Associates LLP conducts mandatory risk profiling for every investor before making any mutual fund or SIF recommendation, in compliance with AMFI Master Circular for MFDs (Para 2.2) and SEBI guidelines.
Risk Profiling Process
1
RISK PROFILING QUESTIONNAIRE
Every investor completes a 12-question Risk Profiling Questionnaire (RPQ) covering: age, income, net worth, investment experience, time horizon, risk tolerance, loss capacity, return expectations, liquidity needs, dependents, financial goals, and existing investments.
2
SCORE CALCULATION & RISK CATEGORISATION
Responses are scored and the investor is categorised into one of six risk tiers: Very Conservative (12-20), Conservative (21-30), Moderate (31-40), Growth (41-50), Aggressive (51-58), Very Aggressive (59-72).
3
SUITABILITY MATRIX APPLICATION
The risk category is mapped to suitable mutual fund categories using a 6×3 Suitability Matrix (Risk Tier × Time Horizon: Short-term < 3 years, Medium-term 3-5 years, Long-term > 5 years). Only schemes that fall within the suitable range are recommended.
4
RECOMMENDATION & DISCLOSURE
Suitable scheme categories are discussed with the investor. Commission disclosure is provided. Risk disclosure is shared. The investor signs the Risk Profile Declaration.
5
UNSUITABILITY PROTOCOL
If the investor insists on investing in a category beyond their risk profile, an Unsuitability Declaration is obtained. The investor acknowledges in writing that the investment is not suitable for their risk profile but they wish to proceed at their own risk.
6
ANNUAL REVIEW
Risk profile is reviewed at least once a year or upon any material change in the investor's financial circumstances (job change, retirement, inheritance, marriage, etc.). Updated RPQ is completed and suitability is reassessed.