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NISM XXV-B Cheat Sheet

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Planning and Markets

  • 12% of exam
  • Financial Planning Risk Profile Markets Investor Protection

Investment Basics

  • 12% of exam
  • Securities Risk Return Compounding Allocation Rebalancing

Financial Asset Classes

  • 16% of exam
  • Equity Debt Derivatives Risk Regulation

Financial Products

  • 16% of exam
  • Mutual Funds PMS AIF SIF Insurance

Sales Skills

  • 24% of exam
  • Client Profile Communication CRM Negotiation Continuity

Professionalism and Compliance

  • 20% of exam
  • Fiduciary Duty Suitability Ethics Boundaries Compliance

Quick Facts

  • Exam NISM Series XXV-B
  • Role PAIA sales/non-core
  • Questions 50 MCQs
  • Duration 60 minutes
  • Pass 25/50 marks
  • Negative marking None
  • Validity 3 years
  • Mode Remotely proctored

Planning Sequence PL

  • Define, gather, analyse, recommend, implement, review.
  • Define Gather Analyse Recommend Implement Review

Tolerance vs Capacity PL

Risk tolerance

  • Willingness for loss
  • Behavioral comfort
  • Emotion driven

Risk capacity

  • Ability for loss
  • Financial resources
  • Goal driven
  • Assess both, never one.

Financial Planning PL

  • Financial plan Goal-led money roadmap
  • Goal Specific desired outcome
  • Time horizon Time until goal
  • Risk tolerance Willingness to bear loss
  • Risk capacity Ability to bear loss
  • Cash flow Income less expenses
  • Emergency fund Liquidity for shocks

Markets and Protection PL

  • Financial market Transfers funds and risk
  • Primary market New securities issue
  • Secondary market Existing securities trade
  • Regulator Oversees market conduct
  • Disclosure Material information provided
  • Grievance Client complaint route
  • Investor protection Fair market safeguards

Saving vs Investing IN

Saving

  • Near-term reserve
  • Liquidity focus
  • Usually lower risk

Investing

  • Goal-led deployment
  • Return seeking
  • Risk varies
  • Match horizon and need.

Investment Foundations IN

  • Saving Income not spent
  • Investment Commit funds for return
  • Return Gain or loss
  • Risk Return uncertainty
  • Compounding Returns earn returns
  • Asset allocation Mix asset classes
  • Rebalancing Restore target mix

Primary vs Secondary IN

Primary market

  • New issue
  • Issuer raises funds
  • Initial allocation

Secondary market

  • Existing security
  • Investors trade
  • Price discovery
  • New issue differs from trading.

Securities Markets IN

  • Security Tradable financial claim
  • Issuer Creates security
  • Investor Provides capital
  • Intermediary Facilitates market activity
  • Liquidity Ease of selling
  • Diversification Spread exposures
  • Market value Current trading price

Equity vs Debt AS

Equity

  • Ownership claim
  • Variable return
  • Market-price risk

Debt

  • Lender claim
  • Contractual payments
  • Credit-rate risk
  • Explain characteristics; do not recommend.

Asset Class Essentials AS

  • Equity Company ownership interest
  • Dividend Profit distribution
  • Debt Borrower repayment promise
  • Coupon Bond interest payment
  • Government debt Sovereign borrowing
  • Corporate debt Company borrowing
  • Derivative Value from underlying

Financial Product Map FI

  • Mutual fund Pooled investment vehicle
  • PMS Portfolio management service
  • AIF Alternative investment fund
  • SIF Specialized investment fund
  • Retirement product Long-term income support
  • Insurance Risk protection contract
  • Financial planning Integrates products and goals

Sales Flow SA

  • Listen, clarify, explain, record, follow-up.
  • Listen Clarify Explain Record Follow-up

Client Conversation Path SA

  • Client begins discussion → Establish purpose
  • Facts are unclear → Ask open questions
  • Goal appears → Confirm time horizon
  • Risk arises → Record profile inputs
  • Product is requested → Explain stated features
  • Advice is requested → Escalate to adviser
  • Client decides → Document next steps
  • Follow-up is needed → Update CRM

Sales and Relationships SA

  • Client profiling Collect relevant client facts
  • Needs analysis Identify client priorities
  • Advisory sales Client-centered sales approach
  • Active listening Hear before responding
  • CRM Manage client relationships
  • Negotiation Seek workable agreement
  • Service continuity Maintain client support

Ethics Check ET

  • Client first; boundaries always; escalate doubt.
  • Client first Boundaries Escalate

PAIA vs Adviser ET

PAIA

  • Sales and non-core
  • Explains approved information
  • Escalates advice

Investment adviser

  • Provides investment advice
  • Applies suitability
  • Owns advisory judgment
  • Never cross the advice boundary.

PAIA Boundary Check ET

  • Task is sales → Proceed within process
  • Task is non-core → Follow firm controls
  • Client seeks recommendation → Do not recommend
  • Individual suitability is needed → Escalate to adviser
  • Conflict appears → Disclose and escalate
  • Information is sensitive → Protect confidentiality
  • Complaint is received → Follow grievance process
  • Rule is uncertain → Ask compliance officer

Professional Conduct ET

  • Fiduciary duty Put client interest first
  • Suitability Match client circumstances
  • Role boundary Stay within permitted work
  • Compliance Follow applicable requirements
  • Ethics Choose principled conduct
  • Conflict Competing personal interest
  • Confidentiality Protect client information

Common Traps

Advice Boundary

  • XXV-B covers non-core services ≠ Do not make recommendations

Risk Profile

  • Tolerance differs from capacity ≠ Use both profile components

Product Language

  • Explain features accurately ≠ Avoid guaranteed-return language

Market Concepts

  • Primary means new issuance ≠ Secondary means investor trading

Exam Logistics

  • Fifty one-mark questions ≠ Sixty minutes total

Last Minute

  • 1. Know all six module weights
  • 2. Separate tolerance from capacity
  • 3. Recall compounding and rebalancing
  • 4. Contrast equity, debt, derivatives
  • 5. Map funds, PMS, AIF, SIF
  • 6. Use client-centered sales language
  • 7. Protect confidential client information
  • 8. Escalate recommendations to advisers
  • 9. Remember fifty percent passing
  • 10. Remember no negative marking

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