The KYC Process
 

A financial advisor is required to conduct a rigorous investigation of your circumstances, known as the Know Your Client (KYC) process.The KYC process includes a detailed investigation of a client’s financial situation, needs, goals and risk tolerance. It also involves a clear explanation of all the terminology and jargon used in financial industry forms, prior to a client signing them.

For example, a good financial advisor can both explain the term “risk,” and gain essential knowledge of a client’s risk tolerance simply by asking, “If your investment were to decline by 20% in three months, would you be able and willing to wait for a possible recovery of that loss, or would you immediately sell that investment?”

The KYC process is the bedrock on which financial advice is built. It requires an ongoing dialogue between you and your financial advisor, not simply a static snapshot of your financial situation at the time you first meet. This process involves a highly subjective and detailed reflection of your financial circumstances at any given time. A financial advisor who fails to address and revisit the KYC process is unprofessional and negligent.

Contact us if you feel your advisor failed to appropriately get to know you and your financial situation and needs.