Countering Client Anxiety With Risk Scores Rooted in Reality

Market volatility is par for the course in investing—yet it can still catch your clients off guard. When markets dip or volatility prevails, investors often let their emotions rule, sparking feelings of anxiety (and even panic). This can lead to a premature sell-off, which can drastically reduce their returns in the long run.  Case in […]

Why Risk Preference and Risk Capacity Need to Be Scored Separately

Totum Risk bar

Risk tolerance questionnaires have traditionally consisted of questions that produce one score centered around risk preference or attitude, which advisors then use to create portfolios or record the rationale for how they match clients to specific firm models. This can often create misalignment as it may not expose the entire reality of an individual’s overall […]

Why Fact-Based Multidimensional Risk Capacity Is a Superior Approach for Financial Advisors to Profile Their Clients

risk capacity meter

Advisors have traditionally used risk tolerance questionnaires and basic timelines as the basis for portfolio recommendations. Unfortunately, these practices are riddled with flaws. As outlined below, including and prioritizing risk capacity offers a far superior method in advising clients with their investments. The Pitfalls of Risk Tolerance Questionnaires Risk tolerance, or preference, is based on […]

How the Right Risk Profiling Can Help You Close Clients (No, Really!)

Totum Prospects

As discussed in our article Traditional Risk Tolerance Questionnaires Lead to Inaccurate Risk Appetite, risk tolerance questionnaires help mitigate biases and emotional subjectivity in investing decisions. But risk profiling through TIFIN Wealth’s Risk Alignment tool takes it a step further. Unlike other questionnaires that only provide one aspect of risk at a time, our platform […]