Are You Considering More Than Just Investment Risk?

Traditionally when the topic of risk comes up financial advisors and wealth managers think of investment risk. How much loss can my clients tolerate when the market goes down? How aggressive or conservative should the investment strategy be?

Then there are advisors who have focused less on the investment side and gone to the life planning side. This too is important in the context of knowing the client and helping them achieve their goals.

However, what sits between whether the client creates and protects the wealth to achieve their goals is their behavior.

In a nutshell, there are many more risks than only the clients current investment risk tolerance that need to be known in building a long term financial plan and investment policy statement. What must also be known is the clients natural hard wired risk behaviors, their financial behaviors (eg spending and financial habits) and their relationship behaviors which if not managed can cause financial risks.

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