Matthew Williams, director at Prudential Portfolio Management Group, reveals five basic principles to remember when risk profiling your clients.
In our industry, much is said about the need for customer solutions to be appropriate from a risk perspective. However, risk can be defined in many different ways with each definition concealing many subtleties. While it may look like a minefield, there are some straightforward principles that could assist in understanding risk as a more general concept. The first thing to bear in mind is that customer risk appetite and investment product risk are measured in different ways. Essentially customer risk appetite is based on emotional response and human attitude, and many excellent questi...
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