Periodic updating of the profile

A risk profile taken once, and never looked at again, goes stale. Clients change. Their family, their income, their goals all shift over time.

SEBI (Investment Advisers) Regulation 16 asks for more than a one-time form. The client's information, and the risk profile built from it, must be updated periodically.

The workbook does not fix a single mandatory interval — it says periodicity can vary — but it does name the triggers that should prompt a review regardless of the regular schedule: a change in family composition, a change in income or expenses, or a change in assets or liabilities.

This sits alongside the separate Regulation 16 requirement that risk profiling itself must be objective, not skewed to give undue weight to some factors over others, and that any questionnaire used must be fair, clear, not misleading, not vague, not in complex language, and free of leading questions.

Illustrative scenario. Mr Kulkarni was risk-profiled as "moderate" three years ago by his Investment Adviser. Since then, he has had a second child, his monthly expenses have risen, and he has taken on a home loan — three separate triggers on the workbook's own list.

His adviser is expected to re-run the risk profile at this point rather than continue advising him against the three-year-old profile, since a change in family composition (the new child), a change in expenses, and a change in liabilities (the home loan) have all occurred together. Continuing to recommend the same equity-heavy portfolio suited to his old profile, without reassessing his new ability to absorb losses, would not meet the Regulation 16 standard.

Chapter 18 (Risk Profiling for Investors), section 18.2, "Parameters for Risk Profiling," states the periodic-updating requirement and its named review triggers as part of SEBI (Investment Advisers) Regulation 16. Expect a question naming one of the trigger events and asking whether a profile review is warranted.

• The workbook does not prescribe a fixed review interval — "periodicity can vary" is the actual wording; a question implying an exact number of months or years per Regulation 16 on this point is testing a figure the workbook does not give.
• The three named triggers are family composition, income/expenses, and assets/liabilities — a question may test recall of these specific categories rather than a vague "life changes" answer.
• This is distinct from profiling before advice, which is about the very first profile being done before any advice at all — periodic updating is about keeping an existing profile current.