Risk Return profile

Investing

“I ‘m so glad I decided to get a financial plan done, and particularly to have been helped by Alison.  She doesn’t use superfluous and off putting jargon, but neither did she talk down to me at any stage.  She has nudged me towards several ideas, but never forced me – something which was very important to me personally.  I was also impressed with how thoroughly she has analysed the different areas such as insurance, saving for concrete goals, a will, retirement, mortgage repayments, the different types of investments, and taxation.”

Martin B

Identifying your investment risk & return profile

Assessing a client’s desired return and risk perception

A diversified investment portfolio consists of defensive and risky assets that can be classified into cash, fixed interest, shares, property and alternative assets (hedged funds, futures).

It is important to assess our client’s tolerance to fluctuations in investment returns. We look at:

    • a client’s tolerance to their risk and return return trade off.
    • a client’s risk capacity – short term capital loss that they can sustain.

This is key to our investment advice as we are seeking risk adjusted returns.

There are various methods available to determine an investor’s risk and return profile.

Lyfords’ advisers use a detailed psychometric testing programme. It is a comprehensive financial risk tolerance test from FinaMetrica .

This test gives a reliable in-depth insight into a client’s financial attitudes, values, motivations, preferences and experiences. This is a scientifically validated approach and helps to remove any bias an investment adviser may have.

In order to access the FinaMetrica web site we will provide you with a user id and password. You will be able to complete a short questionnaire online. This take will take about 15 minutes to complete. On completion you can access the FinaMetrica report directly.

You can also try our quick risk/return profiling tool on this web site.

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