Project Description

Current risk profiling fails clients

Bernard Del Rey met with Jason Spits to discuss the current climate of investor risk profiling, and the risks associated with the wide-spread methods used today.

“Many risk profiling systems that we have seen have been built as bespoke offerings within an advice business and have their own scoring systems which is akin to ‘witch doctoring’ with the client’s preferences,” he said.

“The failure of questionnaire based risk profiling can be seen in law suits against advisers who had risk profiling. The adviser may not have been wrong according to the risk profile but the position is indefensible because the adviser cannot place a statistical accuracy on how well they have actually profiled the client,” Del Rey said.

 

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Bernard Del Rey
Bernard Del ReyCEO & Founder