Risk and Return
Different people are comfortable with different levels of risk, and the whole issue is a difficult one. Risk aversion sometimes prevents us from doing as well as we might financially - yet some of life's most unpleasant surprises arise because we were exposed to a level of risk beyond our comfort zone.
To enable our clients to properly measure their capacity for investment risk, we ask them to take our 25 question risk tolerance questionnaire. This is a psychometric test which evaluates attitude to investment risk, and provides a suggested asset allocation which best suits the investor's emotional reactions to changing investment conditions.
Developed in conjunction with the University of New South Wales' Applied Psychology Unit, the questionnaire we use is based on the FinaMetrica Personal Financial Profiling system. It exceeds international standards for tests of this kind.