How much risk are you willing to take?

How much (or little) risk do you need to take?

One of the key components of structuring a financial plan is assessing investment risk.

We use Finametrica, the global leader in scientific risk assessment to measure your risk tolerance and sensitivity to market ups and downs.

We then work out your Personal Rate of Return. This is the rate of return you require on your pension and investments to achieve your desired lifestyle, taking into account the expected growth or decline in your capital as identified by your cashflow forecast.

Your capacity for risk is how much of a loss you could suffer in a market downturn without it affecting your lifestyle. This varies depending on your age and where you are in your working life. The nearer you get to retirement, the less capacity for risk you will have.

Investment term is very important, and will be influenced by your age, health and succession plans.

Creating Your Financial Plan

Keeping On Track