Investment Risk Profiling

All financial advisors must carry out an investment risk profile analysis, prior to recommending any suitable investment strategy for their clients.

This risk and reward profiling, is to help place clients within their appropriate investment volatility level (risk rating), taking, plan type, time horizon and risk affordability into account.

These volatility levels are known as ESMA risk ratings, and play an important role in advising clients, but this is just the first layer to robust investment risk management. Managing long-term volatility within set target ranges is hugely important, as is an understanding the dangers of behavioural bias and herd mentality.

We utilise Longboat Analytics tool Fund Focus to provide us with daily market data analytics to help enable better investment recommendations, using the real-time fund data to compare individual fund performance and value, against market peers.

In making our recommendations will also display and explain our use of total expense ratios (TER) as well as Sharpe ratios relevant to your portfolio. This provides genuine costs transparency, as well as appropriate risk and reward.