Support for Professional Advisers Risk Profiling Of all the decisions that go into financial planning, the one that will have the greatest impact on a client’s future is this: how much investment risk should you take? In order to work this out, you need to consider the three different aspects to risk profiling: Risk tolerance The psychological willingness to bear investment risk. Expressed another way, this is the willingness to accept a higher chance of a ‘poor’ outcome in pursuit of a higher chance of a ‘good’ outcome. Risk capacity The financial ability to withstand financial loss, or a fall in value of volatile assets. Think of this as the extent to which your client's future lifestyle would be affected if they lost all or part of the amount invested, or if the value of their investments fell temporarily because of market uncertainty. Goals and aims The reasons why your clients wish to invest. They may have very specific goals, or they may just have a vague idea that they want to invest for a number of years without being certain what the money will be used for We take this very seriously. We use the latest tools and techniques to help you calculate how much risk your clients can tolerate, how much they can afford, and how much they need to take to achieve their goals. We’ll also show you how to balance these three factors in order to help set realistic objectives. You can read more in our Understanding your risk brochure by clicking here. Services Wealth & Financial Planning Advice Products, Services & Performance Support for Professional Advisers Sponsorship & Events About Us Who we are What we do How we do things Why we do things Careers Media Recent News Blogs Point of View Foundation Connect Contact Us Privacy & Cookie Policy Accessibility Legal © Sanlam. All rights reserved. Sanlam UK Limited is the provider of the Sanlam website. If you would like to view the regulatory and legal status of each Sanlam company to which this website relates, and the services and products which they provide, please click here. Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.