Fifteen common risk profiling mistakes (and how to avoid them)

Investment suitability is the foundation upon which good investment advice is built. Not only must the investment be suitable with regard to the investor’s goals, but also with regard to their risk capacity and risk tolerance. As the Financial Services Authority (FSA) outlined in its guidance consultation on replacement business and CIPs recently, risk profiling provides a proven methodology to ensure the suitability of investment advice. It requires sound processes and robust tools (which are now readily available) and advisory skills. Getting investment suitability right is there...