A2Risk profiling: simpler than simple questions 

It is tempting to think that the simplest way to assess a customer’s attitude to risk is to ask a simple question. Something like “What level of investment risk are you comfortable taking?” Or perhaps “Which of these investment strategies suits you best?” 

For someone working in financial services, these questions look straightforward. 

For many customers, they are not. 

To answer such a question, the customer may first need to understand what the different risk levels mean, what types of investments they might involve, and what the implications could be for their money. This takes time for them to read about and think about. The customer is immersed in financial concepts and asked to make decisions. This is a lot to ask of busy people and especially of less experienced investors. 

Yet this is something we see repeatedly in risk profiling. Investment professionals can find it difficult to put themselves in the position of someone with little financial knowledge. What looks like an obvious self-assessment to an investment executive may be a surprisingly difficult question for a member of the public. 

A well-designed psychometric questionnaire takes a different approach. Rather than asking customers to decide which risk category best describes them, it asks a series of simple statements about how they would feel or behave in different circumstances. The customer doesn’t need to know what “moderate risk” means or understand the difference between asset classes. They just need to respond to simple statements in everyday language.  

The result is a simpler and more understandable experience for the customer. 98% of respondents complete the A2Risk ATRQ in less than four minutes.  

This matters even more for Targeted Support. The FCA has made it clear that whilst not essential, a simple questionnaire can be used within or alongside a Targeted Support journey. The challenge is not simply to make the questions short. It is to make the questions easy for the customer to engage with while still producing a meaningful and reliable risk assessment. A2Risk have developed an even simpler process to suit Targeted Support. 

A2Risk have focused on the need for simplicity since day one. Founded in 2006, we have spent a long time keeping journeys short. We like to make life simple. A simple questionnaire is simpler than a simple question.