Riskalyze is a great tool when you have clients that are computer savvy. But what happens when your clients aren’t quite so quick with technology?
We have many advisors that use the technology, but in a creative manner that still helps comfort and educates clients and maintains necessary documentation. This assures the client that your goal is their comfort in investments, so they do not feel overextended or a short time away from a plunge. It also aids in documenting many of their thoughts and decisions. After all, there are probably fewer emails and other written responses from the client.
We suggest starting off with a Riskalyze printout of the client’s existing portfolio to discuss their comfort level on the portfolio and the six-month range. If they are fine with it, document the discussion (a good tip would be to get the client to initial the notes made by the advisor). Otherwise, begin walking down the road of alternatives.
In some cases, we have seen where clients are walked through the risk questionnaire if they can’t seem to pinpoint their comfort zone. Utilizing the “Launch Now” feature in the advisor’s office is a good method to do this. Also, consider using "Set Manually" if you already have a good idea of the client's comfort zone.
Pro Tip: Read more about the various approaches to the Risk Questionnaire here: Capturing a Risk Number
Stress testing the portfolio before every appointment for a) a stock market correction of 15% and b) a spike in interest rates is an additional step that we recommend before the client meeting. Please note, this is a good step for all clients, not solely for any one group.
For the advisor, knowing that it helps produce documentation for many of the decisions is great. For the client, it provides a rich experience. In an era where so many aspects of our lives are being performed via technology, being able to demonstrate to the client that software can help them feel safer and know they are protected from unnecessary or high risks can come as a sigh of relief.