How to handle a client with low risk tolerance
If loss aversion is high, here's how an adviser can approach the situation and make up for lower long-term investment gains.
Risk tolerance questionnaires, scores and levels are a big focus right now in retirement income planning. While many of the tools are still rudimentary (e.g., your desire to skydive probably isn't tied to your investment risk tolerance), we do need to gauge the risk tolerance levels of our clients.
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