Questions raised about investment risk questionnaires
Risk profiling, the subject of much debate, is now in the spotlight
The questionnaires financial advisers typically use to give you investment advice, assess your investment-risk profile and categorise you as a conservative, moderate or an aggressive investor, are fundamentally flawed and result in inappropriate advice being given. Anton Swanepoel, a director of Amity Wealth and author of two industry papers on the topic, says that although risk profiling has been a source of much debate over many years, but it is only getting the attention it deserves now. Swanepoel, who is also a director of the Financial Intermediaries Association, says FIA warnings about the questionnaires, supported by the Financial Planning Institute, have resulted in the establishment of an industry committee to investigate the problem. He says FIA and FPI surveys conducted in 2015 revealed that more than 87% of 554 authorised investment advisers participating in the survey expressed the opinion that the questionnaires were insufficient for providing appropriate advice to inv...
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