More risk profiling needed: Prossor
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Financial planners need to profile their clients more than once every three to five years, according to a director of Synchron, John Prossor.
Client risk profiles changed more often than once every two to three years, so clients needed to be profiled more often to match, he said.
However, it was wrong to think that doing a risk profile was the be-all and end-all of risk management, Prossor warned. Planners also had to think of where they were in the share market cycle, he said.
You can do a risk profile on a client and still recommend a different investment strategy, he said.
Sean Graham, head of advice at Milennium3 Financial Services, said it was difficult for advisers to come up with a clear idea of what risk their clients could tolerate and planners had to spend more time talking to their clients about what investment risk would mean for them.
“I think in a lot of cases where it has fallen down it has not been the risk profiling itself, but the way in which it’s been explained to the client, and the way in which they’ve understood it,” he said.
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