Advisers shy away from challenging clients on their attitude to risk, despite evidence suggesting funds with higher risk ratings were more likely to give stronger returns in the long-run, according to research from FE.
The study of 210 advisers found 71% only "occasionally" encouraged their clients to take more risk to help them reach their financial goals, while 11% never attempted to do so. The remaining 18% said they often did so. FE said the findings were surprising given almost half (43%) of advised clients did not adopt an aggressive attitude to risk in the accumulation phase of saving. The research also suggested advisers struggled to articulate risk accurately, with almost three-quarters (73%) conceding they relied on attitude to risk questionnaires to explain risk to clients. About six-...
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