By admin on July 4, 2017
An Attitudinal Risk Assessment questionnaire is an essential tool that allows us to determine and understand a client’s acceptance and attitude about risk.
Risk is a very personal matter and as such must be assessed against an individual’s personal knowledge and past experiences. In order to gain an informed perspective, we have worked with a psychologist/cultural anthropologist to define the four dimensions of risk that must be considered and scored to establish a framework that can be employed when designing a portfolio solution for a client.
These dimensions of risk include:
- Willingness (to accept more volatility in order to achieve higher returns)
- Knowledge (understanding of capital markets risk return trade-offs)
- Experience (past experience during varying cycles in the markets)
- Capacity (ability to withstand extreme market swings relative to established goals and time horizons)
Our questionnaire is scored through these four dimensions of risk with appropriate weightings given to critical elements, such as capacity. The results of this questionnaire are then married with the defined goals, flowing out the Wealth Planning process, which allows us to design a portfolio solution that aligns with the goals and behaves in a manner that provides our clients with the comfort and confidence they desire.
