A risk tolerance test may not be scientific, but it can indicate your client’s psychological disposition towards money and help you draw some conclusions. There are several online examples that use scenarios to reveal your client’s psychonomics, their mindset on money. Consumers actually appreciate taking the test to discover insight on how they may feel during a down market, a bear market or black swan event.
Married couples should take the test as individuals. This can demonstrate the differences in one’s approach to market risk. It often exposes the gap between their tests results and their actual holdings. It’s not uncommon to review an aggressive portfolio and a risk tolerance that are not in agreement. Your client’s attitude towards their holdings needs to be discussed, recorded and place in their client profile.
Risk tolerance tests can be part of your firm’s online advertising campaign. You’ll need to secure your compliance department’s approval before moving forward with any public promotion of your firm.
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