Risk profiling

Risk profiling sits at the core of financial planning and is absolutely fundamental for determining an appropriate investment strategy for our clients.

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Aims of risk profiling

The risk profiling process presents a unique opportunity to thoroughly examine the relationship between risk and return, and to ensure the suitability of investment advice. The intended result is a client who fully understands and is comfortable with the potential outcomes of the portfolio they have invested in, as it has been matched to their risk tolerance.

There is often a mismatch between the level of risk that someone needs to take to achieve a goal (risk required), the risk they would prefer to take (risk tolerance), and the risk that they can actually afford to take (risk capacity).

Rather than being a ‘one-off’ event, the risk profiling process needs to be revisited on a regular basis. This ensures that a particular investment strategy not only remains suitable with regards to a client’s goals, but is also consistent with their capacity for loss and risk tolerance.

With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.

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Your risk profiling report

Walden Capital uses an internationally acclaimed risk profiling system called Finametrica. Based on psychometrics (the blending of psychology and statistics), Finametrica is a web-based system which has been used by 650,000 individuals since 1998.

When instructed by us, the system will invite you via email to answer 25 questions that will take about 15 minutes to complete online. You will then receive an instant risk profiling report placing you in one of seven numbered risk groupings (see illustration).

Our regular progress meetings consider your wealth enhancement, wealth transfer, wealth protection and issues that are important to you.

Next steps

We will discuss your report at your Discovery Meeting with Walden Capital and these findings, combined with our own statistical analysis of the data produced, will help decide which of our volatility-based model portfolios is most appropriate to meet your needs.

The risk profiling process presents a unique opportunity to thoroughly examine the relationship between risk and return, and to ensure the suitability of investment advice. The intended result is a client who fully understands and is comfortable with the potential outcomes of the portfolio they have invested in, as it has been matched to their risk tolerance.

 

 

There is often a mismatch between the level of risk that someone needs to take to achieve a goal (risk required), the risk they would prefer to take (risk tolerance), and the risk that they can actually afford to take (risk capacity).
Analysis of historical data allows us to identify the individual risk of our model portfolios and their suitability for individual clients.

We appreciate clients have different approaches and these will change over time.
Rather than being a ‘one-off’ event, the risk profiling process needs to be revisited on a regular basis. This ensures that a particular investment strategy not only remains suitable with regards to a client’s goals, but is also consistent with their capacity for loss and risk tolerance.

The investment team is constantly reviewing the risk profile of our model portfolios to ensure consistency and confidence. We have seven different risk profiles, allowing clients to allocate elements of their funding to different strategies. The statistics show that being out of the market is one of the most significant risks when tracked against long-term returns.

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We are independent, our advice is impartial and our fee structure is transparent. Our approach is simple: we build trusted relationships and focus all our energies to build personalised strategic plans to meet our clients’ individual needs. Helping you achieve your life goals, whatever they may be.

If you’d like to find out more, or learn how we can help you reach your investment goals, get in touch.

(+44) 1799 521017

[email protected]

Knowledge & resources

The latest news, information and opinion on the current financial situations and trends plus useful guides to investing, pensions and making the most of your wealth.

Knowledge & resources

The latest news, information and opinion on the current financial situations and trends plus useful guides to investing, pensions and making the most of your wealth.

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