Totum

Accelerating Innovation in Risk Measurement Tools For Financial Advisors

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Risk is not an absolute. It is ever changing with many shifting variables. That is why risk is so hard to succinctly and accurately verbalize with most investors not knowing how to express their very personal feelings about risk or even wanting to discuss their changing perceptions of it. Rapid advancements in technology and data analytics are helping to create new solutions on how to approach risk measurement with clients.

It is for this reason the Institute for Innovation Development sought out Institute member Larry Shumbres, CEO of Totum Riska FinTech company that provides a unique risk tolerance tool that is constantly adding new technology and approaches to the client risk measurement quandary for advisors. He shares with us what he sees as transformational strategies for more holistic risk management measurement and the risks of not adapting them.

 

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Hortz: What do you see as the biggest risks in risk management for advisors in today’s environment?

Shumbres: My concern is that, especially as economic and market risks seems to be climbing, many advisors are not accurately assessing their client’s risk profile. Inaccurate, confusing and outdated investment risk assessments pose a major business risk for them.  Most risk assessment tools are based on a client’s feelings about risk, not how much risk they can take given their current life situation.

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