HKIB ECF-RWM Core cheat sheet
HKIB ECF-RWM Core · Keep the key ideas within reach.
Retail Wealth Management
Suitability rule: a recommendation must match the client's risk tolerance, investment horizon, knowledge, financial situation and investment objectives; a mismatch requires documented justification or rejection of the trade.
Risk profiling has two components: risk tolerance (attitude, willingness to accept volatility) and risk capacity (ability to absorb loss given income, net worth, liquidity needs); both must be assessed, and the lower of the two caps the portfolio risk level.
Client risk categories in Hong Kong retail practice commonly run from conservative/capital preservation through balanced to aggressive/growth; each category maps to an indicative maximum equity or volatility band used at the product-matching step.
Know-your-client data must be refreshed at defined intervals and on trigger events (material change in income, marital status, employment, or investment objective); stale profiles cannot support new recommendations.
Product due diligence covers structure, underlying assets, leverage, liquidity, fee load, credit exposure of the issuer and worst-case payoff; complex or derivative products require additional suitability and knowledge assessment.
Concentration limit rule of thumb: single-product or single-issuer exposure should be flagged when it exceeds a documented percentage of investable assets; the flag triggers a documented rationale rather than automatic prohibition.
Disclosure duties: fees and charges, conflicts of interest, remuneration from product providers, and the nature/risks of the product must be disclosed before or at the point of transaction.
Record-keeping: the suitability assessment, rationale, disclosure acknowledgements and client instructions must be retained for the period required by the regulator and firm policy; the audit trail is the primary defence in a complaint.
Currency and liquidity risk must be assessed separately from market risk: an HKD-income client holding USD or emerging-market assets bears FX exposure, and lock-up or notice periods can conflict with emergency-fund needs.