Financial goals' potential could be unlocked in risk conversations

Many people think that risk is a difficult and complicated part of investing. But new research illuminates a revolutionary approach that has worked successfully and been positively received by clients: starting conversations with a focus on financial objectives.

Tyree Schoen

February 26, 2024

2Min Reads

172

Wealth

The organization underlined the importance of having risk-related conversations in a recent post on EveryoneINVESTED.

Clients find this approach to be more approachable and engaging since it demystifies the concept of risk. They also generally believe that talking about financial goals helps to clarify risk.

For many clients, risk discussions can be intimidating due to the prevalence of complicated models, numbers, and financial jargon. Clients find it much easier to participate when the emphasis is shifted to reaching financial objectives. This approach gives the abstract idea of risk a more concrete and individualized meaning by offering an accessible and tangible context.

Age, gender, experience, and attitudes toward risk had little bearing on the risk-talking sessions with clients. Being profiled is one aspect, though, that greatly affects these conversations. The presence of an advisor and the process of tailored advice that goes along with it is very important in helping to explain the subtleties of risk. It customizes the discussion to the person's particular circumstances and goals, making it a crucial experience for the customer.

The advisory process is not only made more efficient by using digital profiling, but it also solves cost-efficiency issues. Digital technologies make it easier to comprehend and articulate a client's financial behavior at first, which prepares them for more meaningful conversations with advisors and relationship managers.

This first digital interaction adds value to the advice process by giving clients more knowledge and clarity going into the talks, which facilitates a more in-depth and targeted conversation.

Behavioral finance is the foundation of both everyoneINVESTED and Ortec Finance's approaches, which explains why they work so well together. EveryoneThe risk preferences of clients are precisely mapped by INVESTED's profile method, and Ortec Finance utilizes this information to create and oversee portfolios that are completely in line with the objectives of the clients.

The combination of goals-based portfolio management and behavioral profiling gives advisors the tools they need to manage client relationships well, which increases client satisfaction for clients served by organizations using Ortec products.