Suitability is inherently dynamic. It is as much a living thing as the people it applies to. All living things are made up of the four basic elements of DNA, combined in myriad ways; so suitability is made up of four components: risk tolerance; dynamic risk capacity; emotional comfort; and knowledge and experience.
This is the Oxford Risk Suitability DNA. If each of those components is robust, healthy, and in balance with each of the others, they will combine in all their various ways to guide people to the best possible decisions.
Suitability is the relationship between the investor and what they should invest in. Thinking about this as a relationship makes us consider what it means to be a good investor, rather than merely what it means to own a good investment portfolio.
The aim of Oxford Risk’s suite of decision-support tools is to:
Enable an adviser to help the investor make consistently better financial decisions by using science to support their advisory skills.
Set the investor’s risk profile in the context of their personality, and their current and future assets, as well as their level of financial understanding.
Proactively protect the investor against their most likely – and most costly – behavioural mistakes.
By providing both deeper insights and better evidence of these insights, Oxford Risk’s tools help advisers to satisfy regulatory requirements while creating opportunities for greater investor engagement within a dynamic adviser-investor relationship.
An advice business needs consistent processes that are as streamlined as possible, and built into existing systems rather than bolted on.
The Oxford Risk assessment API is designed specifically for integration into existing systems, coming with the hands-on support and education necessary to ‘train the trainer’ and ensure a smooth implementation. The API becomes part of your firm’s digital set-up and feeds information back to the Oxford Risk platform, which takes the anonymous set of answers and sends back reports to be stored and matched back to the relevant investors.
A ready-to-use version of the API is also available with a standard web-based user interface for immediate deployment ahead of or instead of API integration.
Investors need advice that accounts for their psychology, their circumstances, and their emotions using a consistent, objective methodology. It should be engaging and easily understood, helping them feel supported throughout their investment journey.
Only Oxford Risk can:
offer such a comprehensive package of behavioural-based insights;
assess both risk tolerance and short-term changeable behaviours while – importantly – not confuse assessment of one with the other; and
dynamically quantify investors’ risk capacity, setting financial personality in the context of financial circumstances
Regulation requires formal defined processes, but also evidence that those processes were followed. It demands evidence of investor psychological and financial insights, the technical capabilities of the tool, and how the tool is used to map the investor to a suitable set of investments - all areas where Oxford Risk has a strong track record.