1. First, you'll need to create a client profile if you haven't already done so:
2. Next, click Risk Number just above Create Portfolio and you'll be presented with the options to Set a Risk Target or Send a Questionnaire:
Options for Sending a Questionnaire
Upon choosing to Send a Questionnaire, you'll be given the option to choose between sending a Simple or Detailed Questionnaire. The differences between these two questionnaires are discussed in the next section of this article, Risk Number Approaches. You'll also see optional fields for Client Name, What is the Purpose of this Assessment, and Investment Amount. Filling in these fields will let you customize how the questionnaire appears to your client.
- Client Name: If you’re working with a household (Wayne and Dianne Diaz, for example) you have the option to define a more specific “Client Name” for the questionnaire. Whatever you type here, will be used to greet the client on the first slide of the questionnaire you create. If you don’t define a client name for the questionnaire, we’ll still greet the client on the first slide of the questionnaire, with the name saved for them within Riskalyze.
- Purpose: The purpose field provides you with additional flexibility when assessing a client’s Risk Number®. Whether you’re aiming to address risk tolerance at a more general goal-level, or you want to capture one per account type, defining a “Purpose” for a questionnaire allows you to define the investments a given questionnaire pertains to. Anything defined in this field will be pushed to the welcome slide of the questionnaire.
- Investment Amount: As always, you can pre-fill the investment amount for a questionnaire prior to sending or launching it.
Once you've selected which questionnaire you'd like to send, it is time to choose how you'll send it. There are three ways you can send a questionnaire to a client.
- Share Link: Generate a link to the questionnaire that you can copy and paste into an email to the investor. This is a great option if you want to use your own customized email template, or to include the questionnaire link along with other notes to the client - such as a meeting invitation.
- Email: Send a formatted email directly from Riskalyze to the client (and a copy to yourself), or choose to send it just to yourself so you can add a few personal touches before forwarding it on to the client.
- Launch Now: Choose this option if you're completing the questionnaire in person with the client. This allows advisors to walk investors through the questionnaire and offer value along the way. Many advisors provide this service as a benefit to a fee-based relationship, while others charge a consulting fee.
Tip: Use Launch Now to have the questionnaire open and ready on a laptop or iPad for when your client arrives at the office.
Risk Number Approaches
Set a Risk Target: We developed Risk Targets for clients you already know quite well or for advisors that prefer to start their process with goals, portfolio analysis or financial planning. Simply select the Risk Target that is most aligned with the account or portfolio objective. When you set a Risk Target, you’ll see a set of preset ranges, or you can click Set Manually and pick the exact Risk Number you prefer. When you set a Risk Target, you’ll see a red target icon on the upper left of the Risk Number, to signal that it’s a target.
Simple Questionnaire: Don’t let the name fool you. The simple questionnaire is built on the knowledge and data we gained from tens of thousands of completed risk questionnaires.
The simple approach starts out by collecting "Know Your Customer" information and then proceeds to ask the client their perception of risk vs. reward. The investor is given a slider bar to choose how much downside risk they would accept for a given level of upside potential.
Riskalyze will then ask 2-3 confirming questions. The confirming questions test whether the investor would lean towards more return or less risk if all things were equal.
After the confirming questions, the investor is presented with their Risk Number ®, to be discussed with their advisor. The client has "buy-in" to the solution as they determine if the results fit their comfort level using their real dollar amounts.
The simple approach is ideal for clients who are elderly, not computer literate, or just don’t prefer to think in detail. This is also the approach used in the Lead Generation Questionnaire embedded into the websites of our advisors.
Detailed Questionnaire: The detailed questionnaire is highly analytical and quantifies risk tolerance with a high degree of mathematical certainty.
It also begins by collecting "Know Your Customer" information, then asks the investor their devastation amount. The investment and devastation amounts are the foundational basis for the resulting risk/reward questions.
The risk/reward questions help the investor teach Riskalyze when they would prefer a certain outcome over a 50/50 risk (equivalent to a coin toss). The questions are dynamically based on all previous answers. The number of questions typically ranges from 7 to 12. Each answered question helps Riskalyze pinpoint where the investor is on the risk curve.
At the end of the questionnaire, the client reviews their Risk Number and comfort zone and approves it to use in their investment discussions with their advisor.
PRO TIP: Want to learn more about the Detailed Questionnaire? Check out our Riskalyze Academy Lesson which guides you step-by-step through the questionnaire - answering methodology and best practice questions for each step along the way.