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Discussing risk

Once the risk questionnaire has produced your client’s initial risk rating, it’s important to explain what the rating means and discuss its implications, so that you can ensure they invest at a level of risk they are both willing and able to take.

Our risk discussion tool has been built to support your risk discussion. The tool shows the implied volatility and potential annual returns for Old Mutual Wealth's risk levels 1 to 10. Please click on the tabs at the top of this section to access the tool through our website or as a mobile app.

The FCA advises against unduly focusing on just the investment risk a client is willing to take while failing to take account of other possible needs and objectives such as repaying debt or access to capital. The FCA’s assessing suitability paper (see ‘further information’ on the right) highlights why ensuring a client understands the risks they are taking with their investment is so important to the advice process.

Once a risk score has been established and agreed with your client, a portfolio can be built with an asset allocation which is optimised to provide the maximum expected return for that particular level of risk.

Risk discussion toolThis risk discussion tool has been built to support the risk discussion between an adviser and a client following the completion of a Old Mutual Wealth risk profile questionnaire.

The tool shows the range, and the average, of expected annual returns for Old Mutual Wealth's risk levels 1 to 10. It is important to remember the figures generated by the tool below are not intended to be, and should not be taken as, a projection of the likely returns.

To make the risk profiling process more efficient for you and your clients, our app allows you to complete the relevant risk questionnaire, get the risk score and then discuss with your client what their risk score means, all in one go, during a single meeting.

Appetite for riskThe Old Mutual Wealth Risk Discussion mobile app is available for free from iTunes and Android Market (now Google Play).

The iPad version provides an enhanced user experience compared to the iPhone and Android versions. Thanks to the larger screen size of the iPad the risk discussion feature of the app now enables you to compare against two other risk levels, rather than the one comparison risk level on the iPhone version. The iPad app is intuitive to use, and we’ve given you more options when it comes to saving and sharing the output PDF. We’ve also included a number of useful tips within the app to help you make best use of it.

Following your client meeting, you can email back to your office a PDF, including details of the discussion and the final agreed risk score for use with Old Mutual Wealth’s online investment tools.

Download the advice process template

Choose a coloured Word template to create your own branded document of the advice process.


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