Mountains

Risk Profiler

An investor's financial affairs and objectives are likely to require human assessment which cannot be substituted with a system based approach. However, our risk profiler can help to assess the two elements of an investor's risk profile shown to the right. The profiler provides you with feedback, which can promote further discussion.

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Please note the objective of this review is to help your financial adviser to assess your attitude and ability to take risk. This questionnaire does not constitute financial advice or endorse the advice you may receive from an adviser.

The questions are designed to allow your adviser to analyse your responses in the context of risk tolerances. The review is a guide only, therefore you should set out any specific objectives separately.

Your attitude to investment risk is central to selecting an investment portfolio, please consider each question carefully and provide the most appropriate answer. The answers you provide may be used by your adviser to recommend a suitable portfolio.

Investors and advisers should ensure that they are familiar with the Margetts risk scale, as this may differ to other providers.

Ability to take risk

An investor's capacity for loss is a factor of the following elements:-

Time Horizon – Long-term investments provide greater opportunity for losses to be recovered and grow, therefore more risk can be taken.

Liquidity – If income or withdrawals are required to be taken from the portfolio, especially in the short term, the level of risk that can be afforded will be reduced.

Wealth – Investors with a higher asset base relative to their future needs will have a higher ability to take risk. In addition, investors with a higher disposable income will be able to offset losses with higher savings and therefore have a higher ability to take risk.

Willingness to take risk

An investor's willingness to take risk is subjective. Just because an investor has a high ability to take risk does not mean that they need or want to take more risk.

An Adviser's relationship with an investor helps them to understand their risk aversion. In addition, hypothetical questions relating to losses, range and experience can help to build a picture of an investor’s willingness to take risk.

Understanding the Risk Profiler

Download our guide to the risk profiler.