London, U.K.-based Pocket Capital Ltd. is introducing its Pocket Risk analytics software, designed to assess investors’ tolerance and capacity for risk, to financial advisors in Canada.
The tool comes in the form of a compliance-approved questionnaire, comprised of 15 questions that advisors can share with clients online.
Unlike standard risk-profile questionnaires, the tool accounts for psychological and behavioural finance factors, says John Ndege, Pocket Risk’s CEO.
“Most risk-tolerance questionnaires are not compliant and simply want to jam someone into an investment strategy without considering the nuances of a person’s [risk] profile,” Ndege says in an email statement.
There are questions that touch on issues such as how much risk a client is psychologically willing to take; how closely a client sticks to the financial plan; and whether clients have sold investments because of a market downturn, to name a few.
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