Dynamic Planner is enhancing its cashflow tool with two new features.
The first, now live, is a feature providing Financial Personality Insights.
The second feature, looking at Retirement Income, will be launched in the new Year.
The Financial Personality Insights uses the 15 questions to not just identify the client’s attitude to risk, but also to identify the client’s willingness to take risk.
It measure different dimensions of a client’s financial personality by exploring what drives, prevents and enables clients to take risk, and each item within the questionnaire also reflects one of five core financial personality factors:
• the client’s risk-taking identity and FOMO (fear of missing out);
• the constrainers on them taking risk – a preference for certainty; and
• the enablers – tolerance of uncertainty and emotions towards taking more risk,
All of which can work to identify what would unlock their willingness to take more risk.
In line with consumer duty, it provides supporting evidence to assist advisers and paraplanners with selecting a suitable risk profile for the client. Having knowledge of a client’s unique financial personality can help in choosing the most appropriate tools to use when explaining the trade-offs between risk and reward.
“The questions are the starting point and enable the adviser to have a conversation with the client,” said Steph Willcox, Head Actuary at Dynamic Planner.
Dynamic Planner uses a psychometric, whole of life ATR questionnaire, designed to capture the client’s full risk profile, whether in the accumulation or decumulation phases of their financial life. “Your clients conditions change but what we are measuring, their attitude, remains the same and should be measured by the same questionnaire,” the firm said.
The questionnaire has now received over 2 million responses, giving it a robust model to use, when assessing how a client’s ATR may change over time. “We are confident that our model allows individuals at all stages of life to be ranked appropriately in terms of their attitude to risk,”the firm said.
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