Understanding Risk

Risk Profiling is an integral and major part of our service offering to you. Our approach is factual, structured and scientific.

We have a fervent belief that risk is not one dimensional. Our service comes attached to a carefully crafted risk profiling framework, to help you drive understanding on the part of your client of this critical area, and to clearly identify the optimal level of investment risk that your client is prepared to take.

The starting point for matching your clients to a model portfolio is Risk Profiling. This is a process for finding the optimal level of investment risk your clients are prepared to take, considering three areas:

Your clients will have to take a certain amount of risk to achieve their goals from the financial resources they have available. This is their Risk Required which you assess through their Financial Plan.
Your clients will have a certain amount of risk they can afford to take based on their current circumstances. This is their Risk Capacity which you assess through their Financial Plan.
Your clients will have a certain amount of risk they are personally comfortable with taking. This is their Risk Tolerance which is a psychological characteristic which you assess using the Risk Profiling tool of your choice.

The output of our risk profiling framework provides a clear risk conclusion for each of these three areas of risk. The risk conclusions are illustrated on the scale of our risk rated portfolios.