Adviser Masterclass: Maintaining risk profiles in changing market conditions

Maintaining risk profiles in changing market conditions

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Should you re-jig clients' asset allocation in volatile market conditions or is it better to sit tight and leave it be? Rebecca Jones investigates...

You have explained risk versus reward to your client, established a risk profile, gauged their capacity for loss, allocated assets within their portfolio accordingly and, every year, you will revisit that - job done. Or is it? What if, for argument's sake, a similar situation to that of 2008 happens and, despite your best efforts, market movements mean your client's portfolio sheds 30% in a year? In that scenario, do you sit tight, assuming the market will bounce back next year, or do you try to mitigate those losses by changing the client's asset allocation as soon as possible? Accordin...

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