BICA Qualification key terms

A legal obligation to act solely in another party's best interest, placing the client's welfare ahead of the adviser's own profit, and requiring loyalty, disclosure of conflicts, and care in giving advice.

The requirement that an investment recommendation fits a specific client's objectives, time horizon, financial situation, and tolerance for loss, based on information gathered and recorded during onboarding.

The onboarding process of collecting and verifying a client's identity, address, source of funds, investment goals, and risk profile before opening an account or accepting instructions.

Ongoing checks that confirm who a customer is, understand the nature of their business and expected activity, and assess money-laundering risk so that monitoring and controls match that risk.

Additional scrutiny applied to higher-risk clients, such as politically exposed persons or those in high-risk jurisdictions, including deeper source-of-wealth checks and senior management sign-off.

The identification of the natural persons who ultimately own or control a legal entity or account, typically those holding a defined ownership share or exercising control through other means.

A person entrusted with a prominent public function, or a close associate or family member of such a person, who presents elevated corruption and money-laundering risk and requires enhanced checks.

Evidence explaining where the money used in a transaction or account came from, such as salary, sale proceeds, or an inheritance, used to confirm that assets are legitimately obtained.

An explanation of how a client's total net worth was accumulated over time, distinct from the origin of a particular payment, and often required for higher-risk relationships.

A structured evaluation of how much investment loss a client can emotionally and financially withstand, producing a risk profile used to match recommendations to the client's circumstances.

The division of a portfolio among asset classes such as equities, bonds, cash, and property, which largely determines the portfolio's expected return and variability over time.

Spreading investments across assets, sectors, and regions so that poor performance in one holding has a smaller effect on the whole portfolio, reducing avoidable specific risk.

Market-wide risk that cannot be removed by diversification, such as recessions, interest-rate shifts, or geopolitical shocks, because it affects nearly all securities at the same time.

A statistical measure of how widely an investment's returns vary around their average, commonly expressed as standard deviation and used as a shorthand indicator of price uncertainty.

An estimate of the largest loss a portfolio could suffer over a set period at a stated confidence level, for example a one-day loss exceeded on only five days in a hundred.

A technique that applies severe but plausible scenarios, such as a sharp rate rise or market crash, to a portfolio or firm to reveal vulnerabilities that normal conditions conceal.

The danger that an asset cannot be sold quickly at a fair price, or that a firm cannot meet cash obligations as they fall due, forcing sales at a discount or borrowing at short notice.

Laws, rules, and internal procedures designed to stop criminals from disguising the proceeds of crime as legitimate money, including monitoring, reporting, and record-keeping obligations.

A confidential filing made to the financial intelligence unit when a firm detects activity that may involve criminal proceeds, made without telling the client that a report has been submitted.

An offence committed by revealing to a client or third party that a suspicious activity report has been or may be filed, which could undermine an investigation.

The duty to keep client information private and use it only for legitimate purposes, subject to lawful exceptions such as regulatory requests, court orders, or the prevention of financial crime.

The practice of identifying situations where the firm's or adviser's interests could harm a client and telling the client clearly, so informed consent can be given or the conflict avoided.

A fee, commission, or non-monetary benefit paid by a third party to an adviser in connection with client business, which may be permitted only where disclosed and shown to enhance service quality.

The obligation to take all reasonable steps to obtain the best possible result for clients when executing orders, considering price, cost, speed, likelihood of settlement, and order size.

An instruction to buy or sell a security immediately at the best price currently available, which guarantees execution but not the price received.

An instruction to trade only at a specified price or better, which controls price but carries the risk that the order remains unfilled if the market never reaches that level.

The process of transferring cash and securities between parties to complete a trade, converting an executed deal into a final, legally binding exchange of value.

The safekeeping of client assets by an authorised institution, including segregation from the firm's own property and controls to prevent loss, misuse, or unauthorised transfer.

The rule that client funds must be held separately from the firm's own money in designated accounts, so client assets can be returned promptly if the firm fails.

The regular comparison of internal records with external statements or counterparty data to confirm balances, positions, and cash movements agree, and to uncover errors or fraud.

The requirement to retain accurate, complete records of client instructions, advice, transactions, and compliance checks for defined periods, so activity can be reconstructed and audited.

A chronological log that shows who did what, when, and on which system, allowing supervisors and regulators to trace how a decision or transaction came about.

Rules governing how personal information is collected, used, stored, shared, and deleted, giving individuals rights over their data and requiring firms to keep it secure and lawful.

The obligation to report certain losses or exposures of personal data to regulators and affected individuals within set timeframes, often triggered when the incident poses real risk.

A firm's ability to prevent, withstand, and recover from attacks such as phishing, ransomware, or system failure, supported by controls, testing, backups, and staff training.

Controls and behaviours that detect and block deception such as forged instructions, identity theft, and payment diversion, including call-back verification and staff awareness training.

A written document setting out a client's objectives, constraints, risk tolerance, and permitted investments, providing a benchmark against which portfolio performance and adviser conduct are judged.

The structured process of accepting a new client, covering identity verification, risk profiling, agreement of terms, account setup, and initial suitability assessment before any transaction.

The function of ensuring a firm and its staff follow applicable laws, rules, and standards, supported by policies, training, monitoring, and prompt reporting of breaches to the appropriate authority.