There are significant "flaws" in the use of risk profiling tools which could lead to accusations of mis-selling, according to a financial software provider.
Speaking at a roundtable event, Bruce Moss, strategy director of eValue FE, said many advisers are shoe-horning clients into unsuitable funds based on the answers given in psychometric risk questionnaires. This practice could lead to consumer dissatisfaction as decisions made can be based on short-term volatility and do not take into account a client's objectives or other assets. Moss also felt increasing use of these tools could undermine adviser business as they look to add value in the post RDR world. "How much will someone pay for [such a service]? What could be done that the c...
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