We’ve enjoyed reading Aegon’s excellent “Adviser Attitudes Report 2019” which maps out key trends in the investment advice market.
The report notes 56% of investors have a low or zero risk appetite, which chimes with our own research. Many of those investors will benefit from a considered discussion with their adviser about how much risk they are willing and able to take to meet their financial goals.
Most advisers (97%) use some form of risk profiling tool to facilitate that conversation. As we set out in the guides to our attitude to risk tool, that conversation should be a wide one, covering time horizon, goals and capacity for loss as well as risk attitude. The advisers in the Aegon survey note that about a third of customer agree to take on more risk following the conversation.
The Aegon report lists the risk assessment tools that advisers use. You won’t see our A2Risk name appear directly, but our tool is available to clients of Defaqto (named by 24% of advisers) and Moody’s (5% of advisers). A further 20% of advisers say they use tools offered by providers. Our ATRQ can be accessed via Royal London and Vanguard amongst others.
In house risk assessment tools are used by 26% of advisers. Some of these proprietary tools are excellent and well integrated into the overall advice proposition. But, we’ve seen others that are less well developed and lack a rigorous basis for their approach. Some are not maintained and developed after their initial production. If you’d like us to review your inhouse approach and suggest how it can be improved, please do get in touch.
The full Aegon report is here.