Communicating investment risk

Many mis-selling problems arise from the failure to effectively communicate likely outcomes and the risks involved to the end investor.

How can an adviser successfully communicate risk and ensure that the investor understands: the likely outcomes of their investments and what the journey may be like to achieve these ends? In my last three articles, I have covered: The variety and nature of investment risks and how investors can view these risks differently depending on their reasons for making their investments How an investor’s tolerance to investment risk can be ascertained. The importance of understanding that a psychometric risk questionnaire only measures attitude to investment risk in general. It can, there...