Understand investor psychology with DataPoints’ Investor Profile. More than a risk tolerance questionnaire, the Investor Profile gives you insights into your clients’ financial behaviors and how they can be improved over time.
Does your risk tolerance assessment help you understand client investor psychology? The Investor Profile is a measure of psychological risk tolerance that you can use in your practice to both assess this important characteristic for purposes of portfolio allocation, but also to identify and guide better investing behaviors in your clients. They know they’re supposed to buy low, sell high, but they need you to help them avoid buying high, selling low. The reporting breaks out risk tolerance into five behavioral factors that can serve as a framework for discussions and ongoing coaching for your clients: Investor Confidence, Risk Personality, Risk Preference, Volatility Composure, and Investor Judgment.
Advisors use the Investor Profile to get to known investor psychology from the start of the relationship, to compare spouses on five investor psychology factors, and to anticipate how clients will react during times of market chaos.
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