In late September, the Securities &amp; Exchange Board of India (Sebi) released a concept paper on “Regulation of Investment Advisors”. There is a lot of half-baked stuff there, which I have written about elsewhere and won’t go into in this article. I am intrigued by one aspect of the paper on which there has been no discussion. In fact, there will be no discussion on it, except what you read here. It is called risk profiling, or risk appetite. As Sebi’s paper puts it: “The Investment Advisors or their representatives would be required to do adequate risk profiling of the client …Based upon the risk profiling… suitable investment advice should be provided.

<p><table width='100%' border=0 cellspacing=0><tr><td style='FONT-FAMILY: Arial; FONT-SIZE: 18px; FONT-WEIGHT: bold; COLOR: #0253B7;'><B>Debashis Basu:</B> Irrational choice</td></tr><tr><tr><td style='FONT-FAMILY: Arial; FONT-SIZE: 11px; '>The mumbo jumbo of 

In late September, the Securities & Exchange Board of India (Sebi) released a concept paper on “Regulation of Investment Advisors”. There is a lot of half-baked stuff there, which I have written about elsewhere and won’t go into in this article. I am intrigued by one aspect of the paper on which there has been no discussion. In fact, there will be no discussion on it, except what you read here. It is called risk profiling, or risk appetite. As Sebi’s paper puts it: “The Investment Advisors or their representatives would be required to do adequate risk profiling of the client …Based upon the risk profiling… suitable investment advice should be provided.

Debashis Basu: Irrational choice

The mumbo jumbo of risk profiling or risk tolerance is now part of orthodoxy

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