For many years, large financial institutions have designed their own risk assessment tools, while most independent advisors relied on similar tools built into a software package that they had purchased. These tools generally passed SEC and FINRA regulatory muster, but there was always a question as to how useful they were in assessing clients’ risk profiles under real-life conditions.

Most professionals agree that the question was put to rest during the 2007-2009 bear market: While those tools might have had some value in limiting advisor liability, the vast majority had done a lousy job of measuring client attitudes toward risk. Recently, a number of firms have come to market with standalone applications. One is Pocket Risk, which has an intriguing pedigree and approach.

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