Context has become increasingly important too. D2C tools have to be designed to be understood by the lowest common denominator, however clunky that may make them feel to some users. Adviser tools on the other hand can be more sophisticated because there is a professional involved in the conversation giving a further layer of interpretation to the responses.
The pension freedoms are also pushing forward further evolution of attitude to risk questionnaires, which are now having to adapt to increase their focus on income variability now that retirees are less likely to be relying on the guaranteed income delivered by annuities.
Risk-profiling tools will continue to evolve for as long as the market and regulatory environment in which they operate also change. What will remain constant is the need for advisers to remember that the science behind these tools can only ever tell half the story – it is the artistry of the adviser in responding to the client’s answers to the questionnaires and helping them find their overall risk profile that completes the picture.
Andrew Storey is technical sales director at eValue
