Investment can be risky.
Our risk and reward assessment is one stage in our Financial Advice process. It is important we understand exactly how you would like us to manage your life savings. It is important that we don’t expose you to more risk than you want to take, but at the same time we should not assume you do not want to “speculate to accumulate”.
Let’s help you to understand the risks.
I wrote a short blog to help clients to try to understand Investment Risk. If you have not seen it before then it’s probably worth taking 5 minutes out to read it before you go any further.
Let’s not just guess your attitude to risk
Our assessment that follows should indicate the amount of investment risk that you are willing and able to take. The report generated will then become a useful reminder of what took place during the assessment and will provide a comparison for similar future reports.
Our on-line risk profiler utilises a set of questions to calculate your tolerance to investment loss and your expectations of investment return. The results from the questionnaire will place you into one of 6 risk levels. We will give you the descriptions of each level at the end of the exercise.
We will then select an investment strategy for you based only on the amount of risk you are comfortable with. Our strategy will define an appropriate mix of assets that should offer your desired return but at the same time take the minimum amount of risk possible. We call this particular blend of assets a Model Portfolio. We have four of them.
We think that after we have discussed the assessment you may, for probably the first time, understand your true tolerance to investment loss.
How do you know my result will be accurate?
Basically by trial and error. Although our process has evolved, it has been in place for over a decade now. Each and every client has been asked the same questions on many occasions. The chances are that your answers will match the answers of an existing client who is happy with their selected model portfolio. Therefore investment into the same model portfolio should be suitable for you.