By conflating risk tolerance with behavioural risk attitudes, advisers will potentially replicate (or optimise for) all the silly things investors do already, rather than helping to mitigate and control investors’ more-destructive tendencies.A common failure of risk profilers is to try to elicit separate measures of tolerance for different subcomponents of a client’s overall wealth.If we genuinely want to determine the right amount of risk, it is not sufficient just to measure risk tolerance. It is also not sufficient to supplement this with a narrow model of risk capacity. We also need to help people understand, articulate and dynamically adapt their future goals, plans and aspirations over their journey.
A new independent review has set out how government and the financial services industry can work together to build a culture of social impact investment in the UK. I am very pleased, through Centapse, to have conducted the extensive behavioural and attitudinal research that underpins the enhanced understanding of how to better engage consumers in impact investing that […]
The FT Advisor ran a story on Suitability and the advice process under MiFID II yesterday The article outlined the requirement under the new directive of assessing suitability every time advice is provided, retaining a record of the report, and conducting an annual suitability review. It goes on to assert that MiFID II will also […]
Greg Davies was interviewed after his talk at the Festival of Financial Planning 2017 You can listen to Greg discuss behavioural science, psychology, financial theory and how they apply to Financial Planning and decision making. By using a mix of these elements, people can be helped to make better decisions and improve their financial situation. […]