Compass is a digital end-to-end suitability and client engagement tool designed to guide investors in their decision making. Based on the most advanced behavioural and quantitative finance tools, it’s a market-leading offering from a company with a uniquely powerful heritage in risk profiling and suitability.Find out more
Financial decision making can be challenging. Investors trying to navigate to their desired destination may not always have a complete map. There will be unforeseen challenges and obstacles along the way, on a journey at the mercy of elements outside their control. The route must respond to changes in conditions and circumstances, while ensuring unexpected elements don’t throw the investor off course. The solution requires a compass, exploiting the knowledge and understanding that comes with experience, and not allowing unpredictable emotional reactions to get in the way. Successful investors know the journey may be uncomfortable at times, and that mental preparation is crucial to staying on course and reaching the destination.Find out more
Suitability is at the core of any investment decision process. It’s the distillation of the investor, their preferences and their current situation. Oxford Risk takes a holistic view of suitability, taking account of the person as a whole: their emotions, psychology, behaviour, and experience. Click here to find out more about Oxford Risk Suitability DNA and why it's vital for successful outcomes.Find out more
In last week's superb FT article on matching investors to investment risk, John Kay rightly points out the foolishness of using recent historical volatility as a proxy for (future) investment risk. However, whilst focussing on the problems with establishing the risk of investments, he only briefly touched on determining appropriate risk levels for investors.
Risk profiling is essential to providing good advice, and to ensuring regulatory compliance. Unfortunately, the profiling field is rife with misunderstanding and poorly designed assessment tools, leading many advisers to view risk profiling as an unnecessary box-ticking exercise, rather than a simple and effective way to improve client outcomes.