Min Zhang thinks financial advisors take a short-sighted view of a client’s “risk tolerance.”
Current tools do a great job determining how much financial risk an investor is comfortable taking on and customizing a portfolio based on the metric.
But for Zhang, loss aversion and willingness to take risks measure just one dimension of the client, and not particularly well. Advisors should be looking at human capital, things like health, family, geography and career prospects when determining how much portfolio risk a client should be taking on. Her company, Totum Wealth, has a product that promises to quantify that number.
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