WHAT IS RISK PROFILING?
Risk profiling is one of the core processes of the financial planning advice relationship. Risk profiling aims to identify a client’s level of required return, and therefore risk, to meet their investment objectives, their risk capacity and, their tolerance to risk.
Level of financial risk the client is emotionally comfortable with.
Level of financial risk the client can afford to take.
Risk
Tolerance
Risk
Capacity
Risk
Required
Risk associated with the return required to achieve the client's goals from the financial resources available.
THE STUDY
We seek to determine whether psychological aspects have any relationship to the overall risk profile of a client. Risk profiling provides the foundation for recommendations around investment asset allocations for individual clients, which must be a reflection of the client’s tolerance for risk.
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The results of this study will be used to formulate an understanding of the psychological factors associated with risk profiling, which may influence academia, industry bodies, financial planners, and legislators.
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If you would like to participate to the study take the survey.