All Posts

Clients Request Financial Risk Tolerance Assessment Software

Clients Request Financial Risk Tolerance Assessment Software

When it comes to managing financial assets, clients know that they need to take risk — but exactly how much risk can be an intimidating concept. In general, most people recognize that low risk yields less reward, while high risk can generate a greater return on investment. The same level of risk might be too low for some and too high for others. The key to managing risk is determining the right level of risk for the individual client. This is where expert risk tolerance assessment software comes into play.

What is Risk Tolerance Assessment Software?

Tolerisk® is investment risk tolerance assessment software designed for financial advisors to use in order to determine the amount of risk to take when managing the finances of individual clients. Through Tolerisk®, advisors can incorporate factors such as individual personality, current financial assets, savings amount, continued market growth, tax rates and inflation, as well as capital expenditures, capital inflows, and retirement income. The result is a personalized report that identifies the risk level that is right for that particular person at that point in time. It helps financial advisors tailor their service and develop better working relationships with their clients, providing them with the results that they need and expect.

Why Do Clients Request Risk Tolerance Assessment Services?
Clients request investment risk assessment services for a variety of reasons, including:

  • They are searching for scientific reasoning behind their risk tolerance assessment. The majority of simple risk tolerance questionnaires will provide clients with that all-too-comfortable rating of moderate. While this might seem like a reasonable approach to managing finances, it leaves many people less than confident in their ability to manage their portfolio. Will a moderate risk level grow their assets effectively enough? What if the market drops? Will there be enough money to withdraw in the event of an emergency? This unease leads them to request a survey from scientifically-based risk tolerance assessment software that delivers personalized results.
  • They want a risk tolerance assessment survey that will take into account both their willingness and ability to take risk. Most basic risk assessment programs focus primarily on the personality of the investor, rather than incorporating both their ability to risk their funds and their willingness to do so. Tolerisk® captures the non-linear relationship between these two factors, and incorporates that into the results.

How Does Risk Tolerance Assessment Software Benefit Clients?

Ultimately, clients are able to receive a risk tolerance report that is uniquely suited to their needs and circumstances. They will feel confident taking the necessary risks at that moment in time, knowing that they can easily re-evaluate their risk level at any point in the future. It improves their confidence not only in themselves, but also in their financial manager. With scientific results rooted in fact, they can move forward with their investments and improve their financial situation in the years to come.

By considering a variety of factors, Tolerisk® creates a personalized risk profile for individual clients. It determines the right risk level for that particular person at that moment in time. Beyond that, the client receives a report that is easy to read, interpret and understand. It gives them the conviction to move forward in the market and to stand by their financial advisor.

For more information about Tolerisk® and its scientific approach to risk assessment, request a demo today.