Sesame Bankhall Group (SBG) has created a risk profiling tool for advisers designed to comply with recent Financial Services Authority (FSA) guidance on assessing suitability.
Risk Profiler, developed in collaboration with Barrie & Hibbert, Oxford Risk and technology provider IRESS, uses 18 psychometric questions and four suitability questions to help evaluate a client's true risk tolerance including capacity for loss.
Launching in July, it will only be available to Sesame members and Bankhall customers.
The risk tool will enable advisers to produce tailored client reports explaining and visualising the risk assessment process, summarising information gathered and confirming agreed outcomes, said SBG.
It added the risk tool and accompanying guidance will form an important part of the conversation between adviser and client, ensuring the client's risk tolerance has been accurately assessed and documented in order to protect them in the future.
"The FSA has been very clear about the importance of understanding a client's attitude to risk and their capacity for loss," said IRESS business development director Mark Loosmore. "Advisers need to ensure they have a robust mechanism in place to achieve this.
"SBG are providing their members with a tool that not only uses a well-researched questionnaire to measure risk, but also uses a proven stochastic model to provide forecasts for the growth of the assets and to illustrate their volatility."
Partner Insight: Continuing the Architas education series for clients.
What made financial headlines over the weekend?
290,000 already affected
Putting the tech into protection
Square Mile’s series of informal interviews