Measuring the investor’s risk tolerance is one of the first steps in financial planning. A finalist of WealthManagement.com 2020 Industry Award, our Multi-dimensional Risk Tolerance includes:
- Risk Tolerance Test
- Risk Appetite Questionnaire
Risk Tolerance Test
Intuitive, transparent and to-the-point, the Risk Tolerance Test maps directly to one of your model portfolios.
Risk Appetite Questionnaire
The Risk Appetite mini-questionnaire is a carefully curated list of questions from the repertoire developed by personal finance professors, Grable, J.E., & Lytton, R.H.
It can be used to cross-examine the results from the Risk Tolerance Test. For example, if the client has medium risk appetite but choose an aggressive model portfolio in the Risk Tolerance Test, the client may be tempted by the upside while not fully appreciating the implications of the downside.
If the results from these two assessments are consistent, it gives you the confidence that the result is accurate.