Client Onboarding, Know Your Customer and Suitability
This domain tests the account-opening chain and the reasoning behind a recommendation.
KYC at account opening
- Identity: full name, photograph, signature, date of birth, NIN and BVN plus a valid government ID - verified, not merely photocopied.
- Address and contact verification; source of funds and source of wealth.
- Account type: individual, joint, minor, corporate, trust or estate, each with its own mandate and authorisation documents.
- Corporate clients: certificate of incorporation, MEMART, board resolution, beneficial owners, authorised signatories.
- PEP and sanctions screening; risk categorisation (low, medium, high) driving refresh frequency.
Suitability
Collect objectives, time horizon, liquidity needs, risk tolerance, income and net worth, and experience. Then map the product: capital protection, volatility, tenor, exit terms, charges. Document the rationale, warn on concentration, and record declined advice. Retail and professional clients receive different levels of protection.
Ongoing duties
Trigger-based reviews after an address change, an unusual or large transaction, or a change of mandate; retention of all onboarding records.
Worked example
A 68-year-old retiree investing a ₦20m gratuity needs monthly income and access to capital within a year. The adviser recommends a three-year lock-up unlisted infrastructure fund. Reasoning: the objective is income plus liquidity; the product gives neither and adds valuation uncertainty, so it is unsuitable. FGN bonds or a money market fund fit better. If the client insists, record it as unsolicited and follow execution-only procedures where permitted.
Traps
Treating suitability as a risk score alone; accepting BVN as the only identity evidence; onboarding a company without beneficial ownership; failing to document a client's refusal of advice.