Group 1 - The concept of "suitability management" refers to financial institutions identifying, advising, matching, selling, and trading products based on their attributes and risks, alongside clients' financial needs and risk tolerance [2] - Financial institutions are responsible for ensuring that suitable products are sold to appropriate clients, adhering to legal and regulatory requirements [2] - Risk levels of financial products are categorized from low to high, with five levels defined: Level 1 (low risk), Level 2 (lower risk), Level 3 (medium risk), Level 4 (higher risk), and Level 5 (high risk) [3][4] Group 2 - Level 1 products primarily invest in low-risk short-term financial assets, such as money market funds and cash management products [3] - Level 2 products mainly invest in debt assets with a low proportion of equity assets, presenting a lower overall risk [3] - Level 3 products typically invest in debt assets with equity assets not exceeding 40%, facing some risk of principal loss [3] Group 3 - Level 4 products invest in both equity and debt assets, with equity assets exceeding 40%, thus facing significant principal loss risks [3] - Level 5 products can invest entirely in equity or derivative assets, facing extreme risks of principal loss [3] - The risk ratings are based on past performance and risk conditions of similar products, but do not guarantee future risk-return characteristics [4] Group 4 - Investors must undergo a risk tolerance assessment before purchasing financial products, ensuring their risk capacity meets or exceeds the product's risk level [6] - The assessment includes factors such as age, financial status, investment experience, objectives, expected returns, risk preferences, liquidity needs, and loss tolerance [6] - The validity of the risk assessment is twelve months, after which a new assessment is required for purchasing bank-distributed products [8]

Financial Products Overview - Financial products can be categorized into several types, including currency, bonds, equities, and derivatives, each with unique characteristics and risk-return profiles [1][2] - Currency products are characterized by high liquidity and low risk, with bank demand deposits being a common example, offering low yields but flexibility for daily cash needs [1] - Money market funds, another currency product, typically invest in short-term monetary instruments, providing higher yields than bank demand deposits while maintaining good liquidity [1] Bonds and Their Characteristics - Bond products are generally more stable, representing a debt certificate where investors earn fixed interest and recover principal at maturity [1] - Government bonds are backed by national credit, offering high safety and stable interest rates, suitable for risk-averse investors [1] - Corporate bonds usually yield higher returns than government bonds but carry greater risk due to the uncertainty of the issuing company's performance [1] Equity Products and Their Risks - Equity products, primarily represented by stocks, are ownership certificates issued by corporations, allowing shareholders to participate in profit growth [2] - The stock market can provide high long-term returns, but it is subject to significant volatility influenced by various factors, including macroeconomic conditions and company performance [2] Derivatives and Their Complexity - Derivative products, such as futures and options, are more complex financial instruments [2] - Futures contracts are standardized agreements for future delivery of assets, offering leverage that can amplify both returns and risks [2] - Options provide the right to buy or sell assets at predetermined prices, requiring advanced knowledge and skills for effective trading [2] Investment Strategy Considerations - Investors should clarify their investment goals, whether for short-term gains or long-term wealth accumulation, influencing their choice of financial products [2][3] - Assessing risk tolerance is crucial, as factors like age and income stability affect the ability to handle investment risks [3] - Market conditions also play a significant role, with different financial products performing variably across economic cycles [3] Importance of Financial Knowledge - Continuous improvement of financial knowledge is essential for investors to understand product principles, investment rules, and risk characteristics [3] - Learning financial analysis and macroeconomic analysis methods can aid in making informed investment decisions [3]