Risk Profiling

Protecting your assets and family is important in the event of an untimely death, a disability, or a catastrophic event.

It is vital that a financial plan takes into consideration the risks that one cannot afford to take. In a portfolio, one diversifies their holdings so as to reduce their overall risk and the same needs to be done with respect to protecting one’s overall financial situation. We will help you determine the appropriate amount of insurance coverage (life, disability, long-term care) in order to make sure that one’s goals are still satisfied.

Risk tolerance is how emotionally comfortable a person is with taking financial risk. For example, how much a person is willing for their portfolio to diminish for a chance to make bigger returns. It is psychological and is best measured with a psychometric tool.

By knowing how comfortable a client is with investment ups and downs, advisors can make sure their clients don’t panic, or worse, blame the advisor when a risk is realised.

Risk profiling is a process for finding the optimal level of investment risk for your client by balancing their risk required, risk capacity and their individual risk tolerance.

There is often a mismatch between risk required, capacity and tolerance. We will help you to identify what levels of risk you are prepared and need to take in order to achieve your goals.