I recently went to Wealthfront.com, a leading robo-advisor, and filled out a questionnaire. According to Wealthfront, my risk tolerance score is 7.5 (out of 10), and my asset allocation should be the following:
Sounds great, right? But how do I know if this is the right mix for me? Will another advisor give me the same mix? Chances are they will not. In fact, people have reported dramatically different recommendations from different advisors. So which one to believe?
Add Transparency to Risk Management
It is time to add transparency to risk management.
You can’t directly measure your portfolio against your Risk Tolerance Score of (7.5), but you would be able to measure your portfolio against a target volatility range. This is exactly what we set out to do. Based on your financial situation (age, income and assets), your risk preference and other personality traits, our AI-based algorithms will determine the optimal target volatility range, so you can manage your portfolio to the target volatility.
For transparent risk management, ask your advisor to get in touch with Andes Wealth at firstname.lastname@example.org.