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Learn more about your tolerance for risk

This section will help you understand your attitude to risk, adopting a scientific approach. Money Guidance has taken time to evaluate the risk assessment tools on offer to financial advisers and has also considered current regulatory guidance before offering you the PlanPlus risk assessment tool.

We’re covering the cost of the tool because we believe it’s really worth you understanding your risk profile before making any decisions.

  • Remember, your risk tolerance is just one of a number of important factors that should be considered in assessing what may be financially right for you.  Other considerations you should take into account include your particular needs, objectives and circumstances.
  • This means knowing your numbers – things like your current income and expenditure; previous investment experience; the proportion of total savings/investments represented by any current investment; emergency money needs; planned expenditure over the next few years.
  • This tool will help you assess your attitude to risk, but will not provide you with advice about the investments that are suitable for you.  But it can still be helpful in shaping your ideas about what kind of generic investment portfolio (if any) you could consider.
  • Ask yourself whether, rather than investing, you would be better placed paying off debt, or whether you should really be thinking about creating an investment portfolio with a view to medium/long term growth when shorter term access to these funds may be needed.
  • Your attitude to risk is one thing, but what about your capacity for loss?  For example, will any loss of capital have a materially detrimental effect on your living standards?    Be comfortable that your finances can tolerate any shorter term reduction in the value of riskier investments.
  • And of course, discuss the report with your Money-Coach or Financial Advisor to “sense test” this system’s outputs with a view to ensuring you are comfortable with its assessment of you.

The PlanPlus risk profiling system is internationally recognised and is designed to focus on the psychological factors relevant to financial decision making. Knowing how best suited you are as an individual to investing your money is often a grey area for most people. Appreciating the values and motivations that drive you will allow you to understand and make a more informed choice when it comes to making investments.   This should be an iterative process, as events in your life may subsequently indicate a need to re-evaluate your risk profile.  We therefore recommend that you re-appraise risk assessment outcomes at least every three years.

What we are offering you here is a scientifically-validated tool to help you assess your financial risk tolerance at no cost to you.   Once you have taken this test, we will email you with a written summary of the outcome.

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What happens next?

As soon as you have submitted your details we you’ll be able to take the assessment, which should only take about 5-10 minutes.

And once you’re done,  we’ll email the report to you for future reference.

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