There are several aspects to investment risk, including how investors feel about risk, how much risk investors can afford to or wish to take and the risk of not meeting a particular goal or objective.
Understanding an investor’s attitude to risk will allow the adviser’s recommendations to be tailored to better meet their needs.
In order to establish an investor’s attitude to risk, please complete this questionnaire.
About the questions
The questions are designed to measure risk attitude and risk personality. They are based upon the social science of psychometrics and have been created by Distribution Technology (in association with Oxford Risk, an industry-leading psychometric profiling company).
The attitudinal answers can be used as the basis for discussion and agreement regarding an investor’s final risk profile. Subsequent recommendations will take the investor’s answers into account but will not have a direct bearing on any particular products or funds that may be recommended as a result.
- Record the answers to all questions. It is important that this is done honestly – there is no right or wrong answer. Please bear in mind that the questions relate to the individual generally, rather than any particular investment that is being considered.
- The answers to the questionnaire can be used by the adviser to determine an individual’s risk level, based on the scoring from the questionnaire and a discussion with the investor about their attitude to risk, ability to take risk and risk personality.
Please note:The final selected risk profile will be an important factor in which products and funds are recommended (if any). Consideration should be given to the term over which to invest, the importance of the investment with regard to the individual’s overall financial circumstances, and whether they can afford sustained periods of loss. If they are in any doubt about their risk profile or feel that they have not understood any aspect of this process, they should discuss the matter with the adviser before confirming their risk level.
Risk Profiling Questionnaire: Assessing Attitude To Risk