FinaMetrica Risk Tolerance Questionnaire and Profiling
Risk tolerance measurement and analysis, together with your goals, is a good starting point when designing your investment portfolio.
Over the years you’ll likely change jobs a few times. Your goals and risk tolerance will change, too.
My investment ideas are only as good as their ability to keep up with you, so it all starts with getting to know you and your current investing situation. You may simply need your portfolio fine-tuned, or perhaps major changes are in order. Whatever the case, I’ll recommend a customized portfolio that addresses your needs and goals. And, as your financial advisor, I’ll commit to reviewing your portfolio at least once a year.
Whether you’re looking to change jobs, shifting gears into retirement, or already participating in a investment plan at work (401(k), 403(b), etc.), you owe it to yourself and your family to make sure you’re doing the right things at the right time.
Psychologist Daniel Kahneman won the 2002 Nobel Prize in Economics for bringing to light that people hate to lose money more than they like to make money. Aversion to losses is one reason I ask you to measure your risk profile online at FinaMetrica. I would not want you to be holding a portfolio that is 80% stocks, which might lose 30% in a bad year, when your profile indicates that you would sell everything if it dropped even 5%.
For others, the opposite is true. You might need to take more risks to reach your financial goals. As you financial advisor, I need to alert you and give you options: take more risks, save more money, diversify your investments more, etc. Obviously, each client’s individual risk profile must be respected.
For some individuals, nothing feels worse than seeing their account drop; conversely, for others, they regret losing out on potential gains. Perhaps the first investor’s portfolio was too hot while the second was too cold.
FinaMetrica’s® risk profiling system generates a personalized assessment of an individual’s risk tolerance and provides you an opportunity to gauge if your current investments are too hot or too cold.
The evaluation is web-based, consisting of twenty-five questions, with eight optional demographic questions. It only takes fifteen minutes to complete. Upon completion, you receive a detailed report that includes your risk tolerance score.
After you receive your score, I can transfer it to FinaMetrica’s® asset allocation mapping system to convert your score to a portfolio. I then use fi360’s proposal report to compare your current assets to the portfolio generated from your risk tolerance score.