Advisers 'should review risk assessment practices'

The research, from risk profiling company FinaMetrica, analysed risk tolerance among investors.  It argued that contrary to widespread belief, investor 'risk tolerance' is actually stable in the face of market volatility, while changes in 'risk perception' - stemming from a lack of proper understanding of downside potential - can result from movements in the markets. Although an adviser could do nothing to manage decisions made caused by changes in risk tolerance, if it is the 'perception of risk' that is changeable caused by a lack of understanding at the outset, the adviser is in a ...