Thursday, August 6, 2009

Risk Tolerance, Psychometrics and You

Geoff Davey, founder of FinaMetrica (, talks with me about the differences between risk tolerance, risk assessment and risk capacity. He talks about "psychometrics" and how to get a true measure for the clients' risk tolerance.

Davey's firm is also doing some interesting research. They are surveying investors to find out if their risk tolerance has changed due to the economic downturn and market turbulence. The people they are contacting had worked with an advisor who in the past had used the Finametrica Risk Profiling system. They are asking them to use the same Finametrica Risk Profiling system again to see if their risk tolerance has indeed changed. Stay tuned to this blog and I will post a summary of their research findings as soon as they become available.

For now, do listen to this very interesting and insightful interview:

Impact Communications’ Marie Swift interviews FinaMetrica cofounder, Geoff Davey, about the FinaMetrica system, psychometric testing, the four aspects of risk, marketing opportunities and current research (23 mins.)

MP3 File

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