The Traditional Approach to Risk Tolerance
Assessing client risk tolerance is one of the most important, yet most nebulous, activities within the financial planning process. A person’s level of risk tolerance impacts upon a diverse number of financial decisions, such as portfolio management, type of mortgage, insurance deductibles, estate planning, and so on (Roszkowski and Grable, 2005). For years, the need to understand the attitude of investors toward risk has led both academics and practitioners to find reliable tools to assess the risk tolerance of individuals.
KeywordsRisk Profile Portfolio Management Risk Tolerance Financial Adviser Financial Firm
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