Multidimensional risk capacity approach for financial advisors

Why Fact-Based Multidimensional Risk Capacity Is a Superior Approach for Financial Advisors to Profile Their Clients

Advisors have traditionally used risk tolerance questionnaires and basic timelines as the basis for portfolio recommendations. Unfortunately, these practices are riddled with flaws. As outlined below, including and prioritizing risk capacity offers a far superior method in advising clients with their investments. The Pitfalls of Risk Tolerance Questionnaires Risk tolerance, or preference, is based on …

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