Risk assessment lies at the heart of the wealth management process.  But just why is it important?

If you do not know what to expect from your investments and you do not know what impact risk could have on your financial security and, you do not know how your manager is going to deal with risk, your expectations of risk and return and, possibly your financial security, could be compromised. 

The risk assessment process should be designed to interact with the client and deal with a wide range of issues that will surface throughout the client’s portfolio lifetime.

Your advisor needs to educate you about the basics of investment, about their investment discipline, about how they will run your money and how they will go about managing the key investment risks.

They need to assess your attitudes to these risks and explain to you the effects of these attitudes on the ability of your portfolio to meet your needs, risk preferences and financial objectives.

This first risk assessment should only be a preliminary assessment and should only be used to develop the investment planning and portfolio management report.

After the client has read this report and has met to go over this report, the risk assessment needs to be confirmed and reinforced.

A copy of your risk assessment should be given to you.