It’s a given that financial planners are required to document risk tolerance for fiduciary purposes. But while the traditional way of gauging a client’s tolerance for risk is typically determined using a basic questionnaire, there’s another method that’s just as – if not more – reliable.
Advisor Jay Berger is one of three partners in the Traverse City, Mich.-based firm, Independent Wealth Management. Each partner has about 20 years in the business, and none of the partners likes to rely on questionnaires. Their preferred method, says Berger: “We agree that the best measure of actual risk tolerance is to see what people did in 2008.”
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