Unlocking the potential of financial goals in risk discussions


Risk is often perceived as a daunting and complex aspect of investing. However, recent research sheds light on a transformative strategy that has proven to be effective and well-received by clients: initiating discussions through the lens of financial goals.

In a recent post by EveryoneINVESTED, the company explained the key to conversations on risk.

This approach simplifies the conversation around risk, making it more accessible and engaging for clients, who generally agree that discussing financial goals demystifies the concept of risk.

Traditionally, risk discussions have been dominated by percentages, complex models, and a deluge of financial terminology, which can be overwhelming for many clients. When the focus shifts towards achieving financial goals, clients find it significantly easier to engage. This method provides a tangible and relatable context, which helps in making the abstract concept of risk more concrete and personalized.

The impact of age, gender, experience, and attitudes towards risk on client conversations about risk is minimal. However, one factor that significantly influences these discussions is being profiled. The presence of an advisor, and the personalized advisory process it entails, plays a crucial role in demystifying the nuances of risk. It tailors the conversation to fit the individual’s unique situation and objectives, making it a pivotal experience for the client.

Incorporating digital profiling into the advisory process not only makes it more effective but also addresses concerns about cost-efficiency. Digital tools facilitate the initial understanding and articulation of a client’s financial behavior, setting the stage for more impactful discussions with relationship managers and advisors.

This initial digital engagement enriches the advisory experience, enabling clients to come to discussions better informed and with a clearer vision, thus allowing for a more focused and substantive dialogue.

The methodologies employed by everyoneINVESTED and Ortec Finance are deeply rooted in behavioral finance, illustrating why they are perfectly compatible. everyoneINVESTED’s approach to profiling accurately maps clients’ risk preferences, while Ortec Finance uses this data to build and manage portfolios that are fully aligned with the client’s goals.

This synergy between behavioral profiling and goals-based portfolio management equips advisors with the insights needed to manage client relationships effectively, leading to higher client satisfaction among those serviced by institutions implementing Ortec solutions.

Read the full post here.

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