Risk profile, what it is, how we do it and why we do it

At National Financial Solutions we profile every potential client’s tolerance to risk before we make any investment recommendation.  The reason for this is simple-it ensures that we are recommending investments that suit the individual.

What is it?

Making investment decisions can be very stressful.  Risk profiling can help you make decisions that are suitable to you, as it is a method of measuring personal tolerance to investment risk.  In simple terms, how much risk an individual is willing to make, or not make.  Risk tolerance can be seen as the sum of all the ‘fear/greed’ trade-offs available.  This includes trade-offs between making the most of opportunities and securing financial well-being, between regret avoidance over ‘losses’ incurred from taking too much risk, and over ‘gains’ missed through not taking enough risk, and so on.

How do we do it?

We ask you questions about your past investment experience (good and bad), investment expectations from National Financial Solutions, investment time-frame and also investment knowledge.  This information is analysed to determine what type of investor you are (e.g. aggressive [high risk] or conservative [low risk]), and also how we should allocate your funds.  Once we have obtained your investor profile, we then examine the most suitable strategy.  Once we have decided on the strategy we then look at the investment options available to you.  This process results in your funds being invested across many investment sectors so that they are fully diversified as to your wishes and also your tolerance levels.

Other Areas of Interest

   Risk Profile Analysis

   Investment and Research

   Superannuation Advice

   Retirement Advice

   Risk Management