ARW Wealth Management

Discussing your risk profile score

Your resulting risk profile score is an indication of the extent to which you are prepared to accept a fall in the value of your investments as markets go through their cycles of gains and losses. These fluctuations in the value of investments are also referred to as the volatility of the investment.

If your score is 1, then low volatility investments, such as cash or bank deposits could be the resulting investment recommendation. If your score is 10, then we would consider recommending a portfolio which includes investments in asset classes such as emerging markets and commodities whose higher expected volatility is matched by greater growth potential but also by the increased risk of significant reductions in the value of your capital.*

Before proceeding to make recommendations based on your score, we want to be sure that you understand what that score number means and what its implications are.

We will discuss with you how investment gains and losses might differ between different risk levels, to give you a better idea and understanding of the outcomes you could expect at each level. In this way we can agree with you whether your risk rating accurately matches your true attitude to investment risk and capital loss.

Whatever the result of that initial discussion, we will carry out the same process at our annual review (bi-annual review for our Financial Review clients) with you to ensure that your circumstances have not changed and that your attitude to risk and capital loss remains the same.

 

* please be aware that the value of units can fall as well as rise, and you may not get back all of your original investment.