Trusting Clients’ Financial Risk Tolerance Survey Scores

Neil Hartnett, Paul Gerrans, Robert Faff

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

We examine whether and to what extent financial advisers can trust financial risk tolerance scores derived from client survey responses. We propose using the standard deviation of standardized survey responses as a simple, practical measure for determining the reliability of client risk tolerance measures. Our findings suggest that advisers will better discharge their fiduciary responsibilities by reexamining a client’s survey results if there is substantial variation in that client’s standardized survey responses and resurveying such clients to better gauge their risk tolerance scores.

Original languageEnglish
Pages (from-to)91-104
Number of pages14
JournalFinancial Analysts Journal
Volume75
Issue number2
DOIs
Publication statusE-pub ahead of print - 19 Mar 2019
Externally publishedYes

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