Understanding your attitude to investment risk

Once we have discussed your investment objectives we now investigate your attitude to risk. The level of risk you wish to take with your money will fundamentally shape the types of investment we recommend. We look at your attitude to risk, the reward you would like to see and the volatility you are prepared to accept.

All three are closely connected to each other. If you want a higher reward from your investment you would have to be prepared to take a greater risk. If you want a low volatility range, (the up and down movement in capital value), you need to take less risk and also expect a lower reward. Finding the correct balance between the elements of risk, reward and volatility is an integral part of finding investments that suit you.

We do not expect all of our clients to fully understand their investment risk profiles. However, we do find that many of our clients already have a preconceived idea of their attitude to risk, but we believe discussing, and if necessary, challenging these preconceptions enables us to better establish an accurate basis for our investment advice.

We have a risk profiling questionnaire that we use with our clients. We analyze your responses to these questions using specialized software applications. Directly asking you what risk profile you feel you have provides a starting point for debate and discussion. Your Affinity Adviser will guide you every step of the way.