Writing it down, and having the client confirm it
- 1. Know-your-client (KYC) & Suitability
- Calculators and Scratch Paper
- The Relationship the Rules Describe
- Clients Who Live Somewhere Else
- What KYC Has to Cover
- Tolerance, Capacity and Need
- Business Structures and Why They Change the Answer
- Writing It Down, and Having the Client Confirm It
- The Trusted Contact Person, and the Temporary Hold
- Who Owns KYC, and How Current It Has to Be
- What the Client File Holds
- Account Appropriateness
- The Account Types You Have to Compare
- What the Account-opening File Needs
- The Relationship Disclosure Document
- Keeping Confidential Information Contained
- The Welcome Package
- Product Due Diligence and Knowing the Product
- The Suitability Determination
- Unsolicited and Unsuitable Instructions
- Investment Actions
- Why Appropriateness and Suitability Are Separate Tests
- Monitoring, Triggering Events and Change
- Conflicts of Interest
- Outside Activities
- Personal Financial Dealings with Clients
- Standards of Conduct
- A Client, Worked End to End
- Twelve Ways to Lose Marks on This Element
- Fifteen Terms to Own
- One Item From CIRO's Practice Exam
Know-Your-Client (KYC) & suitability
Writing it down, and having the client confirm it
The record of what you discussed is part of the advice. The syllabus grades this one at remember, which is the exam's way of saying: know that the duty exists, and know what it protects.
A contemporaneous note is written when the conversation is fresh. It records the facts the client gave, the questions you asked, the recommendation you made, and what the client decided. The client then confirms that the information is accurate.
That confirmation does three jobs. It makes the record more reliable than memory. It catches the case where you misunderstood something before it does damage. And it protects both sides later, when a client's recollection and the file disagree.
What the confirmation does not do is make the information true. A signature records a conversation. It does not convert a careless fact into a verified one. When a client's later recollection differs from the file, a contemporaneous, client confirmed note is the strongest thing you can hold, and it is why the exam treats documentation as a substantive duty rather than an administrative one.