New findings from Boston-based global analytics firm Cerulli Associates show that clients feel their advisors often recommend products that do not fit their risk profiles.
Specifically, the firm research reveals a significant disconnect between the percentage of advisors who believe their clients have an aggressive risk level (26%) versus what clients actually report (8%), according to Patrick Newcomb, senior analyst at Cerulli Associates.
Most advisors complete a brief, five- or six- question risk-profile questionnaire with their clients to determine basic information, such as the clients time horizon and reactions to different market cycles, stated Newcomb. In many cases, this is the only interaction before determining the risk model that parallels the appropriate asset allocation.
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