Planning and Markets
12%of exam
Investment Basics
12%of exam
SecuritiesRisk ReturnCompoundingAllocationRebalancing
Financial Asset Classes
16%of exam
EquityDebtDerivativesRiskRegulation
Financial Products
16%of exam
Mutual FundsPMSAIFSIFInsurance
Sales Skills
24%of exam
Client ProfileCommunicationCRMNegotiationContinuity
Professionalism and Compliance
20%of exam
Fiduciary DutySuitabilityEthicsBoundariesCompliance
Quick Facts
- Exam
- NISM Series XXV-B
- Role
- PAIA sales/non-core
- Questions
- 50 MCQs
- Duration
- 60 minutes
- Pass
- 25/50 marks
- Negative marking
- None
- Validity
- 3 years
- Mode
- Remotely proctored
Planning Sequence
Define, gather, analyse, recommend, implement, review.
DefineGatherAnalyseRecommendImplementReview
Tolerance vs Capacity
Risk tolerance
- Willingness for loss
- Behavioral comfort
- Emotion driven
Risk capacity
- Ability for loss
- Financial resources
- Goal driven
Assess both, never one.
Financial Planning
- Financial plan
- Goal-led money roadmap
- Goal
- Specific desired outcome
- Time horizon
- Time until goal
- Risk tolerance
- Willingness to bear loss
- Risk capacity
- Ability to bear loss
- Cash flow
- Income less expenses
- Emergency fund
- Liquidity for shocks
Markets and Protection
- Financial market
- Transfers funds and risk
- Primary market
- New securities issue
- Secondary market
- Existing securities trade
- Regulator
- Oversees market conduct
- Disclosure
- Material information provided
- Grievance
- Client complaint route
- Investor protection
- Fair market safeguards
Saving vs Investing
Saving
- Near-term reserve
- Liquidity focus
- Usually lower risk
Investing
- Goal-led deployment
- Return seeking
- Risk varies
Match horizon and need.
Investment Foundations
- Saving
- Income not spent
- Investment
- Commit funds for return
- Return
- Gain or loss
- Risk
- Return uncertainty
- Compounding
- Returns earn returns
- Asset allocation
- Mix asset classes
- Rebalancing
- Restore target mix
Primary vs Secondary
Primary market
- New issue
- Issuer raises funds
- Initial allocation
Secondary market
- Existing security
- Investors trade
- Price discovery
New issue differs from trading.
Securities Markets
- Security
- Tradable financial claim
- Issuer
- Creates security
- Investor
- Provides capital
- Intermediary
- Facilitates market activity
- Liquidity
- Ease of selling
- Diversification
- Spread exposures
- Market value
- Current trading price
Equity vs Debt
Equity
- Ownership claim
- Variable return
- Market-price risk
Debt
- Lender claim
- Contractual payments
- Credit-rate risk
Explain characteristics; do not recommend.
Asset Class Essentials
- Equity
- Company ownership interest
- Dividend
- Profit distribution
- Debt
- Borrower repayment promise
- Coupon
- Bond interest payment
- Government debt
- Sovereign borrowing
- Corporate debt
- Company borrowing
- Derivative
- Value from underlying
Financial Product Map
- Mutual fund
- Pooled investment vehicle
- PMS
- Portfolio management service
- AIF
- Alternative investment fund
- SIF
- Specialized investment fund
- Retirement product
- Long-term income support
- Insurance
- Risk protection contract
- Financial planning
- Integrates products and goals
Sales Flow
Listen, clarify, explain, record, follow-up.
ListenClarifyExplainRecordFollow-up
Client Conversation Path
- Client begins discussion→Establish purpose
- Facts are unclear→Ask open questions
- Goal appears→Confirm time horizon
- Risk arises→Record profile inputs
- Product is requested→Explain stated features
- Advice is requested→Escalate to adviser
- Client decides→Document next steps
- Follow-up is needed→Update CRM
Sales and Relationships
- Client profiling
- Collect relevant client facts
- Needs analysis
- Identify client priorities
- Advisory sales
- Client-centered sales approach
- Active listening
- Hear before responding
- CRM
- Manage client relationships
- Negotiation
- Seek workable agreement
- Service continuity
- Maintain client support
Ethics Check
Client first; boundaries always; escalate doubt.
Client firstBoundariesEscalate
PAIA vs Adviser
PAIA
- Sales and non-core
- Explains approved information
- Escalates advice
Investment adviser
- Provides investment advice
- Applies suitability
- Owns advisory judgment
Never cross the advice boundary.
PAIA Boundary Check
- Task is sales→Proceed within process
- Task is non-core→Follow firm controls
- Client seeks recommendation→Do not recommend
- Individual suitability is needed→Escalate to adviser
- Conflict appears→Disclose and escalate
- Information is sensitive→Protect confidentiality
- Complaint is received→Follow grievance process
- Rule is uncertain→Ask compliance officer
Professional Conduct
- Fiduciary duty
- Put client interest first
- Suitability
- Match client circumstances
- Role boundary
- Stay within permitted work
- Compliance
- Follow applicable requirements
- Ethics
- Choose principled conduct
- Conflict
- Competing personal interest
- Confidentiality
- Protect client information
Common Traps
Advice Boundary
XXV-B covers non-core services ≠ Do not make recommendations
Risk Profile
Tolerance differs from capacity ≠ Use both profile components
Product Language
Explain features accurately ≠ Avoid guaranteed-return language
Market Concepts
Primary means new issuance ≠ Secondary means investor trading
Exam Logistics
Fifty one-mark questions ≠ Sixty minutes total
Last Minute
- 1.Know all six module weights
- 2.Separate tolerance from capacity
- 3.Recall compounding and rebalancing
- 4.Contrast equity, debt, derivatives
- 5.Map funds, PMS, AIF, SIF
- 6.Use client-centered sales language
- 7.Protect confidential client information
- 8.Escalate recommendations to advisers
- 9.Remember fifty percent passing
- 10.Remember no negative marking
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