03 Sep New Vistas in Risk Profiling
Summary of full article (published by CFA Institute Research Foundation) Risk profiling is fraught with misunderstandings that lead to ill-advised approaches to determining investment suitability. These include using observed behaviour to determine risk tolerance; optimising for “behavioural” risk attitudes, rather than helping clients mitigate and control them; eliciting risk tolerance on subcomponents of overall wealth; using overengineered and unstable approaches for measuring risk...