1 Comment 1 Commentby Susan Edmunds
John Ndege, founder of Pocket Risk
Pocket Risk, a tool used by US and UK advisers, is launching in New Zealand next Tuesday.
It allows advisers to create a dashboard compiling information about their clients' goals, risk tolerance and risk capacity.
They can email questionnaires to clients to fill out to assess their risk profiles, and connect the scores to model portfolios.
It has been available to advisers internationally for four years but founder and chief executive John Ndege said he was responding to requests for it to be made available in New Zealand.
He said it was important for advisers to consider risk, in a time of increased volatility.
Pocket Risk offered a different method of risk profiling, he said.
"Traditionally advisers have focused on one type of risk called 'risk tolerance'. This is a client's psychological stomach for risk.
"But with a product like Pocket Risk advisers will be able to look at a client's risk tolerance, risk capacity, goals and behavioural characteristics. It's a more holistic approach. Instead of just investing based on 'how much risk someone can stomach' you factor in their risk capacity, long-term goals and behavioural characteristics. It's a thorough approach that better serves clients as advisers will have detailed information about their clients and recommend more suitable investments.”
He said most advisers thought their clients had more risk tolerance than they did.
“This is because they forget that clients don't have their level of financial education. The client is not educated to stomach short-term ups and downs for long term gains.”
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