Chris Fleming: Three challenges posed by risk-profiling tools

clock • 4 min read

Risk-profiling tools have provided a framework for advisers to manage client expectations but, writes Chris Fleming, key issues persist that have varying levels of implications for advisers and clients

Risk-profiling tools have done a great job of aligning funds in a consistent manner across the market and have provided a framework for advisers to manage client expectations - the ‘apples with apples' philosophy, as it were. That said, there remain a number of challenges that have varying levels of implications, which advisers and their clients need to be aware of within the process. Let's focus on three principal ones. * Linking investor risk and investment risk: There is no clear way to link the output from a questionnaire - the investor's attitude to risk and capacity - and the resul...

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