We recommend re-assessing client risk preferences at least on an annual basis. While any individual client’s Risk Tolerance and Decision Consistency is generally stable from one year to the next, Loss Aversion can move around a bit more. In particular, life events, such as changing jobs or expecting a baby, can affect a client’s loss […]
By studying a clients’ decision pattern in TrueProfile, you can gain deep insight about their thought process and attitudes—much like physicians can learn a lot about a patient’s health situation by studying X-ray images or blood test results.
However, just as physicians needed learn how to interpret an X-ray image when the X-ray arrived on […]
Upon completing the profiling activity, in addition to their risk scores, your clients will see their Investor Persona. Their persona reflects the combination of their risk tolerance and loss aversion, and places them into one of three zones: Growth-Minded (green), Calculated (yellow), or Cautious (red).
Clients who have higher risk tolerance/lower loss aversion are Growth-Minded. Those […]
If you’ve been given a Partner Code to expedite the set up of your model portfolios, please follow the instructions below.
Login to TrueProfile for the first time. If you have already logged in and completed setup, you can visit here: https://reveal.trueprofile.com/dashboard/setup/importPress “Get Started” to continue.
3. Press “Skip client import (You can do this later)” […]
Most of my clients are being placed in aggressive (or conservative) model portfolios—is that normal?
To sort this out, you’ll want to revisit the model portfolio assumptions that comprise your efficient frontier. We observe that different advisory firms use a range of assumptions that represent sometimes very different efficient frontiers.
Those firms with rosier assumptions (i.e., higher relative returns and lower relative volatility) will find a higher percentage of their clients […]
No. Think of TrueProfile as like a blood test for a physician—it provides critical, precise information about the patient, but it isn’t the only information a physician would use to form a diagnosis and treatment path. The physician will take the patient’s vitals and medical history into consideration, as well.
In the same way, you should […]
Capital Preferences has conducted extensive empirical testing on the optimal number of scenarios to include, which should both maximise explanatory power (i.e., precision) of the risk parameters, while also minimising the burden and effort placed on clients (i.e., 25 scenarios is very tiring and repetitive for clients!). From this testing, and from advanced statistical analysis, […]
Time horizon is entered by the at the beginning of the risk profiling activity. Clients should enter a time, in years, when they anticipate needing 10% (or more) of the investment money in question.
The time horizon entered by a client at the beginning of the risk profiling activity does not affect the mathematics of the […]