It’s every planner’s nightmare: clients who panic and sell at the bottom of the stock market and then tell friends how much they lost on your watch.

Judging risk tolerance accurately is essential for both advisors and their clients. Although planners can provide information and change a client’s perception of risk, once a client has the facts, planners can’t alter how a client feels about the pros and cons of risk vs. reward. In short, says Geoff Davey, cofounder of FinaMetrica, the Sydney, Australia-based risk tolerance profiling firm:   “You can’t educate somebody to be more risk tolerant.”

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