A CLIENT RISK TOLERANCE QUESTIONNAIRE FOR FINANCIAL ADVISORS.
As the name suggest, Neurorisk combines Traditional and Behavioral Finance for a customized assessment that identifies a client’s Risk Tolerance along with any behavioral biases they might exhibit.
Understanding the complexities of Risk Tolerance
Understanding a client’s risk tolerance is more complex than
just completing a questionnaire and receiving a risk score.
Same Risk Score Does Not Equal Same Risk Tolerance
Have you ever had two clients that had similar risk tolerance scores react differently to similar portfolio outcomes? You may have thought, “Why do some clients want to increase the amount of risk they are willing to take if they experience good portfolio performance, while others want to increase their risk after bad performance.” Or maybe you have wondered why clients are reluctant to sell poorly performing investments, but all to happy to sell investments that are doing well.
Understanding where a client’s emotions come from will give you insight into how their emotions impact their financial decisions. When you are able to understand how a client may fell in a particular financial situation you will be in a position to help them through it and ultimately help them make better financial decisions.
Neurorisk’s questionnaire is designed to help you identify behavioral biases a client exhibits in regards to financial decision-making. This provides you with a deeper understanding of your client’s views towards risk, investing, and money in general.