While these questionnaires provide initial insight into a client’s financial goals, there is a major drawback to relying solely on them.

The issue with the majority of risk questionnaires is that their scopes are too narrow, focusing almost entirely on the client’s self-identified risk appetite, while completely neglecting their risk capacity. This approach is unfortunate and inadequate because risk capacity is a more concrete and reliable barometer for a client’s true financial state, which considers what type of deficit they would be able to bounce back from given their unique financial situation. Read more here.]]>

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