Risk Tolerance Profile Questionnaire
FinaMetrica Risk Tolerance Profile
A psychologist, Daniel Kahneman was awarded the 2002 Nobel Prize in Economics for pointing out what some of us intuitively knew already: people dislike losing money more than they like making money.
Dislike of financial loss is the reason I give all of my new clients a risk tolerance questionnaire to complete. For I do not want to build them a portfolio that is 80% stocks, which might lose 30% in a bad year when the client’s risk score indicates they would sell everything if it dropped even 5%.
Disdain for loss can also hinder a client from wanting a portfolio at all, for fear it might not grow fast enough to reach their fiscal goals. As their financial adviser, I need to alert my clients to possible pratfalls and give them solutions: save more, take more risk, or spend less, depending on each client’s individual situation.
Why Risk Tolerance Is Important
For some people nothing feels worse than seeing their account drop; conversely for others they regret losing out on potential gains. Perhaps the first investor’s portfolio was too hot while the second was too cold.
- By generating a personalized assessment of your risk tolerance, FinaMetrica’s risk profiling system provides you an opportunity to gauge of your current investments are too hot or too cold.
- The assessment is web-based consisting of twenty-five questions with eight optional demographic questions. It takes only fifteen minutes to complete. Upon completion, you receive a detailed report that includes your risk tolerance score.
For a free, independent, and unbiased review of your risk tolerance, contact me.
- After you receive your score, I can transfer it to FinaMetrica’s asset allocation mapping system and convert your risk score to a portfolio.
- I then usE fi360’s Proposal Report to compare your current investments to a portfolio generated by your risk tolerance score.
Please send me an email with subject line risk score at firstname.lastname@example.org to take the assessment. When I get your email. I will email you back a link that has a username and password for the www.riskprofiling.com site.