3.1 Introduction

Why a need to use Psychometrics in measuring Risk Tolerance?

The process of personal financial planning is based upon obtaining your client’s properly informed commitment to a set of trade-offs between conflicting alternatives.

A key trade-off decision for your client is between comfort with financial risk and the financial risk required to achieve goals.

FinaMetrica provides a scientifically validated technique for assessing financial risk tolerance and an easily understood methodology for incorporating the assessment into the financial planning process.

Specifically, FinaMetrica provides an ‘apples-to-apples' comparison between risk tolerance and investment risk, enabling you to help your client make properly informed risk/return trade-off decisions, because the elements are separate, understandable and comparable.

FinaMetrica enables you to obtain your client’s properly informed commitment to the risk/return trade-offs in their plan … in a jargon-free, plain-English process that clients find enjoyable and informative.