Dr Gizelle Willows at HUM South Africa 2021
The Limitations of Risk Questionnaires
At Humans Under Management South Africa 2021, Dr Gizelle Willows presented on the critical assessment of risk tolerance questionnaires in financial planning.
The talk addresses the significant challenge of accurately determining a client's risk tolerance, emphasizing the common pitfalls financial advisers encounter when relying solely on standard questionnaires.
Key Points:
- Risk tolerance is often mismeasured, leading to portfolios that may be too conservative, thereby sacrificing potential returns.
- Personality, age, income, and financial literacy are essential factors influencing risk tolerance, yet many questionnaires overlook these variables.
- Advisers should engage clients in discussions that frame risk in relatable terms, enhancing understanding and trust.
- Continuous education and adaptation are crucial as clients' circumstances evolve.
Watching this video will equip financial advisers with practical insights to refine their risk assessment strategies, ultimately improving client relationships and outcomes.
