Sesame Bankhall Group (SBG) has introduced a new risk profiling tool for advisers in collaboration with Barrie & Hibbert, Oxford Risk and technology provider IRESS.
Investor Risk Profiler has been developed to comply with recent FSA guidance on assessing suitability and will use 18 psychometric questions, designed by Oxford Risk, along with four suitability questions from SBG, to help evaluate a client’s true risk tolerance, taking into account clients’ capacity for loss and other key factors.
This system has been developed with technology provider IRESS and, SBG says, will enable advisers to produce tailored client reports that explain and visualise the risk assessment process, summarise the information gathered and confirm agreed outcomes.
Barrie & Hibbert has designed asset allocation and volatility parameters to match the risk profiling tool outputs. It says the tool and accompanying guidance will form an important part of the conversation between an adviser and their client to make sure that the client’s risk tolerance has been accurately assessed and, importantly, documented in order to protect them in the future.
Investor Risk Profiler will be rolled out to Sesame members and Bankhall customers from July.
“Establishing the level of risk a client is willing to take, and their capacity for loss, is the cornerstone of any investment recommendation and is critical to assessing suitability,” said George Higginson, CEO of Sesame Bankhall Group.
“It is an industry issue highlighted by the FSA, making it more important than ever for advisers to have a robust process in place that enables them to consider all the key factors when making a recommendation. Our Investor Risk Profiler will provide the tools to do this, whilst also enabling advisers to demonstrate their value and expertise when discussing the outcomes with their clients.”
