Unified Risk Scoring
Harmonize Product Risk Ratings
Built for Multi-LOB Oversight
Eliminate internal rating conflicts and regulatory exposure caused by fragmented product reviews with a single, authoritative risk scoring framework. Our proprietary scoring model provides a unified risk baseline across all lines of business, powering enterprise-wide KYP records, client suitability and trade surveillance with examiner-ready transparency.
- Product Shelf
- Product Research
- Onboarding & KYC
- Pre-Trade Analyzer
- Risk7 Surveillance
The Know Your Product Gap
Why Legacy Product Risk Ratings
Fail Regulatory Exams
Uncoordinated Manufacturer Ratings
Fund and ETF Facts ratings rely on disjointed manufacturer update schedules, while complex offerings demand custom house views. Without harmonization, ratings become inconsistent across lines of business.
Unrated Equity Blindspots
Individual equities lack mandated regulatory risk ratings, forcing firms to rely on ad-hoc manual scoring or leave single stocks completely unclassified within suitability matrices.
Unauditable Spreadsheet Repositories
Managing shelf ratings in static spreadsheets leaves no version history, no documented decision rationale, and no systemic linkage to the client trades they are meant to govern.
Disconnected Trade Surveillance
When shelf risk ratings exist in isolation from pre-trade suitability engines and post-trade surveillance, compliance teams cannot automatically detect or flag non-compliant orders.
Quantitative Risk Engine
Transforming Complex Market Data
into Standardized Risk Scores
Rolling three years of end-of-day values for each security.
Volatility plus two additional risk variables, combined into one score from 0 to 100.
The score maps to a band on your firm’s 5-band or 3-band scale.
The band follows the security into the shelf, proposals, KYC and surveillance.
Illustrative example: Northgate Balanced Income Fund, a fictional security
Unified Risk Architecture
Standardized 3-Band or 5-Band
Scales Across All Workflows
Align clients, accounts, securities, and trade orders under a single risk classification framework so compliance engines execute consistent, apples-to-apples validation at every touchpoint.
Illustrative example with fictional clients and securities
Governed Rating Exceptions
Documented Rationale
and Full Version History
- Reason code
- Liquidity concern
- Rationale
- Thin secondary-market volume in the underlying holdings. House view set above the calculated band until the next quarterly review.
- Reference
- IC-MEMO-0412
- Effective
- Oct 27, 2026 to Apr 30, 2027, then the calculated rating applies again
- Rating source
- Four Eyes · firm default Fund Facts rating available
- Oct 27, 2026 · 10:42Override recordedS. Patel · Product Review Committee
- Sep 12, 2025Rating reviewedAnnual product review
1A reason for every overrideOverride a rating, score or asset class with a reason code, written rationale, reference number and expiry date.
2Choose the source per productSwitch a fund or ETF between its Fund Facts rating and the Four Eyes rating, product by product, with a reason code, rationale and expiry date.
3The original stays on recordThe calculated rating and its previous values are kept alongside the override.
4Recorded for auditWho changed a rating, when and why is recorded and ready for an examiner.
Where Ratings Are Used
One Rating Across
the Client Compliance Lifecycle
Shows each product’s band and rating date on the approved shelf, so approvals and reviews start from the same rating.
Lets advisors filter and compare products by rating band, alongside peers in the same category.
Client and account risk tolerance sit on the same scale, so KYC and holdings are compared like for like.
Shows the rating on every holding in a proposal before a trade is placed.
Each trade carries the security’s score and band, so surveillance reviews trades against the client’s risk profile.
Illustrative example with fictional clients and securities
Regulatory Alignment
Evidence for KYP
and Suitability Reviews
Regulator expectation
How Four Eyes supports it
Know your product under NI 31-103 s. 13.2.1 (Canada)
Every security on the shelf carries a documented rating with its supporting metrics, data source and rating date
Suitability determination under NI 31-103 s. 13.3, applied by CIRO dealers (Canada)
Clients, accounts and securities share one rating scale, so holdings and trades are compared with the client’s risk profile like for like
Regulation Best Interest Care Obligation (US broker-dealers)
A consistent rating and its supporting metrics give a reasonable basis to understand each product’s risk before it is recommended
Investment adviser fiduciary duty (US RIAs)
Ratings flow into proposals and trade surveillance, and every override carries a written rationale on the record
Frequently Asked Questions
Product Risk Rating FAQs
What is a product risk rating?
A product risk rating is a label, such as Low or Medium-High, that shows how much an investment product’s value can be expected to move. Firms use it to check that each product they recommend fits the client’s risk profile and to evidence Know Your Product (KYP) reviews.
How is the Four Eyes risk rating calculated?
Four Eyes combines volatility with two additional risk variables, computed on rolling three-year end-of-day values. The result is a score from 0 to 100 that maps to a band on your firm’s 5-band or 3-band scale.
Which securities does Four Eyes rate?
Four Eyes rates funds and equities. Each rating appears next to the metrics behind it, such as three-year standard deviation and maximum drawdown, expense ratio for funds and P/E for equities.
Can the product review committee (PRC) override a risk rating?
Yes. The PRC can override a rating, score or asset class with a reason code, written rationale, reference number and expiry date. The calculated rating stays on record, and every change is recorded for audit.
Can we use the Fund Facts rating instead of the Four Eyes rating?
Yes. Your firm sets the Fund Facts rating or the Four Eyes Risk Rating as the default for funds and ETFs, and the PRC can switch individual products with a reason code, rationale and expiry date, recorded for audit. Equities use the Four Eyes Risk Rating.
How do risk ratings support suitability reviews?
Clients, accounts and securities share one scale. Pre-Trade Analyzer shows the rating on every holding in a proposal, and each trade carries the security’s score and band into Risk7 trade surveillance.
How do product risk ratings support Reg BI, FINRA and CIRO suitability obligations?
Regulators in the US and Canada expect firms to understand a product’s risk before recommending it. Four Eyes gives every rated security a documented rating that clients, accounts and trades are compared against, supporting the Reg BI Care Obligation and FINRA Rule 2111 suitability for US broker-dealers, and CIRO Know Your Product and suitability requirements for Canadian dealers. Every rating, override and change is recorded for examiners.
Can we choose a 3-band or 5-band scale?
Yes. Your firm runs a 5-band scale (Low, Low-Medium, Medium, Medium-High, High) or a 3-band scale (Low, Medium, High), and clients, accounts and products all use it.
How do we know a rating is current?
Every rating shows the date it was last updated and its data source, and ratings due for review are flagged on the product shelf.
Security Risk Ratings
See Four Eyes Risk Ratings on Your Shelf
Book a demo built around your product shelf, your rating scale and your suitability and surveillance workflows.