Issue 01NotesCIFC
Know your client, in plain language
KYC is not paperwork. It is the evidence trail that proves a recommendation was suitable — and it is examined that way.
Know-your-client is the process of learning enough about a person to recommend something that actually fits them. It is not a form you get signed and file away.
What you are collecting: their objectives, their time horizon, their tolerance for losing money, their income needs, and anything that would make a recommendation unsuitable.
The shortcut: suitability = the recommendation matches the client's stated objectives and their risk profile. Miss either half and the recommendation fails.
The trap: a product can be excellent and still be unsuitable. Exam questions love that distinction.