Risk Profiling. Apricity's review. July 2018.

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1 Risk Profiling. Apricity's review. July 2018.

2 Introduction. Risk profiling tools can be useful to you, you just have to know how to use them. They can help form the basis of a risk conversation with your client. However, we stress that this should not be the entire basis of the risk score. You also need to consider capacity for loss which luckily, some of these tools do, and also a need to take risk. Therefore, the risk profile tool is only one of the three sections of the risk selection process. This guide has been put together by our sister company, Apricity Compliance. Rory Percival, who has previously worked with the FCA and someone who is now part of our advisory board, has written a report on risk profiling tools helps advisers to understand and be able to choose the risk profiling tool for them. So, we thought we would have a go at doing a similar thing for you. This report is aimed at removing the leg work for you and making a tedious task of researching what risk profile tool is best for you, just that bit easier. We have attended webinars with all of these companies and have also had access to some of their systems. Criteria: Technology - is the tool a good use of technology? Is it speedy? How does it look? Is it practical? Comprehensiveness - does it include both risk tolerance and capacity for loss? And are these clearly distinguishable from one another? Usability - are the questions enough to assess risk tolerance? Are the results easy to understand? E.g. are their category descriptors? Features - are there any added extra features which make is easier for you to do your job or make it easier for your client to understand? Scoring system - is there a scoring system available and is it visible? Customer service - how did each company treat us? Sometimes you can have a really good product, but if the customer service isn t great, then would you be best somewhere else?

3 They Say. FinaMetrica is a dedicated Risk profiling tool identifying the client's risk required capacity and tolerance. They believe that risk tolerance is a psychological trait and as such is best measured using a psychometric tool that ensures its validity and reliability. They say the psychometric integrity of a risk tolerance profile ensure accurate mapping of risk tolerance score to investment portfolios. Pros The system is user friendly, it has a modern vibe and is easy to work with. The home page is very useful for the adviser. It clearly shows how many questionnaires have been sent, how many have been completed and how many are up for review. It makes it easier to see the gaps. FinaMetrica allow each adviser to send the questionnaire to their clients individually which allows the client to complete it in their own time, on their own. This removes any possibility of influence from either the adviser or the client's partner. Partners can also have their questionnaires separately. The scoring system allows the adviser to identify whether or not the client is at the top of the risk category or at the bottom and a discussion can take place as to whether they may want to move up or down a category. The clients review period will automatically be set. There is a feature that allows the adviser to choose the time scale of 1-3 years to review the client's risk tolerance. However, we would always recommend doing it yearly. The investment section indicates the expected Capacity for Loss in response to the questions answered. This will then highlight the most likely preferred portfolio mix giving a breakdown of possible High, Medium and Low risk investment percentages. The Gap Analysis tool is very useful for both the client and the adviser. Each client's risk profile is RAG Rated (Red, Green, Amber) to highlight the different levels of risk the client should or shouldn t take. Within a couple, the report allows the adviser to download them side by side to assess if there is any common ground for the couple in terms of risk taking. The different section includes a breakdown of the questionnaire and the answers the client gave to each question. This allows the adviser to see any differences in risk taking and ask the client whether they understood the question. Again, for a couple, the differences are inserted side by side to show the difference between them. When dealing with FinaMetrica, the customer service was excellent and very helpful. They were more than happy to help and answer any questions we had.

4 Cons On some of the risk questions there is up to 7 possible answers and not all are assessed the same, which could lead to confusion for the client. The 25 questionnaire is very lengthy. A client may become discouraged or pay less attention towards the end and therefore they may select answers that is not a true reflection of how they feel. It will be work double checking the answers. However, there is also a 12 question questionnaire. While the tool does address capacity for loss, it does not go into a great deal of detail and depth as compared to other risk profile tools. The questionnaire is assessed from very low risk to very high risk. Within this they have a average risk answer. This we don t think it s practical to have an average risk option as we have found that if a client does not understand the question they will select this answer as they believe it s neutral and not impact their risk score as much. Therefore, to counteract this, it is important to check the understanding of any question where a client has given this answer.

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6 Costs. FinaMetrica offer competitive prices on their services, and a relationship with one of FinaMetrica s alliance partners makes you eligible for further discounts on their service. FinaMetrica s services start at 795 for one year s subscription. Two years 1,471 (7.5% discount) Three years 2,046 (14.25% discount) The above calculations are based on one adviser, for multiple advisers they treat this on a different basis through the company however it can provide company discounts starting at 10% for 6 advisers or more. Overview. Overall we feel that there isn t much to fault FinaMetrica with. To break down our view: Technology - The system didn t run slow, it is visually appealing and is up-to-date with modern technology. It is a rather practical system to use. Comprehensiveness - the questionnaires take into account both capacity for loss and risk tolerance which in this site, are distinguishable from one another. However, Capacity for Loss is not covered off as in depth as others Usability - The questions are thorough and you can choose whether or not to use 12 or 25 question questionnaire which gives you the choice to go more in depth if you wish. We felt as if the questions would help to accurately reflect the client's risk profile. Features - You can send the questionnaire to the client and send them separately if you have a couple, which can then be placed beside each other to see where the two clients differ from one another. Also, the Gap Analysis tool is very useful for both the client and yourself. Scoring system - the scoring system allows your client to see if they are at the top or bottom end of the risk category and if they would like to move risk categories accordingly. The system details why they are in the risk profile they are because of how they answered certain questions. Customer service - The customer service we received was lovely. They were there for any questions we had and despite who we working with being in America, we didn t have to wait longer than 24 hours to get a response.

7 We Say. We rated FinaMetrica really highly as is offers a lot that others don t. The site is easy to use, both tolerance and capacity are addressed, there are many added features, it s great. Contact: If you would like to get in touch with FinaMetrica, you can contact them via , phone or by an online form. Just click this link - Alternatively, if you would like a free 30 day trial, then click this link -

8 They Say. Synaptic offer six different services to offer advisers, a Comparator, Modeller, Product & Fund, Webline, Risk and an Analyser. The tool is an objective risk measure for your investment recommendations - achieved via access to the industry s leading stochastic engine from Moody s Analytics. The difference that it will make to your clients is that you will receive better advice outcomes - from superior risk analysis and management and you will achieve informed consent quantify possible investment loss and gain using a meaningful and consistent measurement of risk. Pros Each purchase includes a 2-hour webinar training per module with CPD for the license holder, there is also an annual refresher training, as well as technical support whenever the adviser needs it. Synaptic have five mandatory areas of risk which are Cautious, Moderately Cautious, Balanced, Moderately Adventurous and Adventurous. These can be customised depending upon the company requirements. After the questionnaire has been completed, the sliding scale can be changed and the risk category can be altered before the adviser submits the questionnaire. It is easy for you to store your client s information within the system. The client/report page is very user friendly for the adviser. All the client s assets and platforms etc. are listed in the same areas which is great for you. Other clients can also be added across the top to allow multi view of clients. When dealing with Synaptic, the team couldn t have been more helpful, there was always someone present to help us and answer any questions needed. They went above and beyond for us.

9 Cons The questions do not specifically address the Capacity for Loss the client and does not offer a broad spread of questions to allow a full understanding of the client s experience. The questions are assessed from strongly agree to strongly disagree here we also have the issue of no strong opinion which can mean the client did not understand the question. Again, clarification on whether or not the client understood the question is needed. It doesn t give a clear indication why the client has achieved that risk rating. It doesn t break the questions down into you are in this category because you answered this question like this... The client and adviser are not able to understand the algorithm behind it. The investment options shown may limit the outcome by the providers if working from a restricted basis. Costs. Synaptic Product & Fund Whole of Market research ( VAT RRP) Synaptic Comparator Costs and charges analysis and pension switching ( 60 + VAT RRP) Synaptic Analyser Income drawdown analysis and product comparison ( 57 + VAT RRP) Synaptic Webline Quote and apply portal for protection and annuities (Complimentary with any paid licence) Synaptic Risk ATRQ and Risk Rated Funds (Complimentary) VAT per month per licence, minimum term 12 months VAT per month per licence, minimum term 24 months VAT per month per licence, minimum term 36 months All of the above include 2-hour webinar training per module with CPD for the licence holder and annual refresher training as well as technical support when you need it.

10 Overview. Overall this is what we thought of Synaptic Software: Technology - the system was easy to use and navigate round, it wasn t as modern as FinaMetrica, but it still got the job done. Comprehensiveness - The risk questionnaire addresses risk tolerance but doesn t address capacity for loss. Usability - The questions are satisfactory to assess the client's risk tolerance and you are provided with a sliding scale at the end of the questionnaire which allows the adviser to show the client the different risk descriptors which the client can read and change accordingly. Features - On top of the sliding scale, all of the clients assets and platforms etc. are listed in the same areas which makes life easier for you with other clients able to be added across the top to allow multi view of clients. Scoring system - there is a scoring system as there is a number attached to the risk category, however there is nothing anywhere that indicates at what point the client enters a new risk category so the client or the adviser cannot see if they are at the top or the bottom and the risk category. Customer service - The customer service we received was amazing, we couldn t have asked for anything more. They were there for us throughout and still are now if we have any more questions. We get regular checkups to see how we are and how Apricity is doing. We Say. Due to the questions not assessing capacity for loss and there being no obvious scoring system, we felt that this was not the best risk profiling tool we have come across. However, as there are some really good features within the system and the customer service was amazing, we rated it quite highly. Contact: If you would like to contact Synaptic to know some more information or to ask any questions you may have, then simply click on this link -

11 They Say. O&M Life & Pensions Limited was incorporated in The risk assessment is a combined part of O&M s product suite although it can be accessed separately and does not depend upon using the full system. The clients have no independent access to the electronic version. Pros The assessment technique of the questions resembles more of a multiple-choice style which removes the no strong opinion issue. Plans can be added together on different tabs so they are all accessible on the same space/areas which is always helpful when assessing the client's situation. One feature we really like is the Smart Paste feature. This allows the adviser to paste in the client s data. The system will then extract the applicable values from the data and apply with to the correct fields. This will save the adviser time when inputting the client s information. O&M have put notifications through the system, they appear mostly when an adviser inputs something incorrectly in the system. It will alert the adviser to what is the issue and what they can do to rectify this issue. Provide useful help videos on the site. Cons The front page isn t as visually appealing/modern as other systems we have seen. The system at times did run slow and we had a few glitches when using the system. But as we use Mac computers the issue may only be with Macs. There is an option to print but this needs to be added as a custom option. The case is saved on the system and can be reviewed at later point. No scoring system is evident so it is not clear if the client sits at the top or the bottom of the agreed risk profile.

12 Costs. The costs for O&M are based on full packages that include not just the risk profiler but other features as well: Essential package: - monthly payment from 45 /monthly or annual payment (see below) per user login Standard package: monthly payments from 75 /monthly or annual payment (see below) 2 user login Professional package: monthly payments from 120 /monthly or annual payment (see below) 3 user login An additional login price is 20 regardless of which package you are on. All pricing plans are subject to a setup fee. * When paying for 12 months upfront, three months will be given free of charge at the end of the initial 12 months, making the equivalent monthly rental 36 for Essentials, 60 for Standard and 96 for Professional over the 15-month period. Overview. Technology - the system didn t run slow but the layout and working of the system is rather old-fashioned as isn t as modern as other systems. It did take us more time to understand and become used to the system compared to other providers. Comprehensiveness - the questionnaire takes into account both the clients risk tolerance and their capacity for loss which some other systems don t. Features - you can paste in client data which will save you time, they have helpful videos to watch and if you have input something wrong, the system alerts you of this and does not let you continue until the issue has been rectified. Usability - the questions assess both capacity and tolerance which will assess the clients risk correctly. They also have more ways of answering the questions which helps to eliminate the no strong opinion or neither agree or disagree issue Scoring system - there is no scoring system evidence. Therefore, the client or yourself cannot see the client's actual risk score and whether or not it would be best for the client to move up or down a category. Customer service - Pretty great customer service. We couldn t really fault them.

13 We Say. Due to the system is more old-school, being more complicated to use, there is no scoring system and just as the system generally didn t wow us as much as others did, we didn t rate it as highly. Contact: If you want to contact O&M then you can do either by online form, address or phone number. Just click this link so see the contact details - Alternatively, if you want to grab the bull by the horns and book your free no obligation demo, you can by calling them on or by - sales@omsystems.co.uk

14 They Say. Dynamic Planner say their mission is: To enable financial planners and institutions to help their customers achieve their goals and ambitions. We do this by helping ensure the suitability of their investments through accurate risk profiling and engaging, risk-based financial planning they can trust. Pros The funds that are recommended within Dynamic Planner are whole of market. They have 1,200 + multi asset funds. The tool is very in depth, the questions cover 4 areas, investor experience, attitude to risk, capacity for loss and a consistency check. They have a rating system similar to FE. their gold badge funds are those where the risk profile of the fund will never change. The fund managers will manage the fund to ensure it never goes above or below the set risk given which can be useful for some. If you select a fund which is a risk score 4 and want to change this to a 5 for example, this will send a warning to the fund manager who will either accept or reject the change There is a clear graph to give the client where it will show them where their risk is at currently, what their target is and what is recommended for them. They offer 10, 15 and 20 question questionnaires. The 10 and 20 are Oxford Risks and as some complaints were made about the questions, Dynamic Planner created their own 15 question questionnaire is response. They have done some research and found that the investment review can be done in as little as 45 minutes. You can your client the risk profile questionnaire before your meeting with them so it is done prior. This way it removes any adviser bias and it saves time as it is done prior. It can also be done by paper, there is a joint and singular one, or it can be done on the Apple App. The system will flag any inconsistencies within the answers given. This gives you a starting point to discuss it with the client. When you have come to the end of the questions, you can alter the clients risk score and this will then show you how the risk score will impact the client's potential losses and growth. This is great for capacity for loss as the client can see in numbers before them how much they would be able to lose. For the report, you firm s logo can be inputted into them. They have a great list of user guides which covered everything you will need to know to help you get the best out of Dynamic Planner.

15 Cons The most recent five clients are listed at the side of the system, along with the five most recent cases. This can become confusing as the cases will be any piece of research done for a client and it will be that piece of research. The system is a little complicated to work at first as it covers many steps, but it doesn t take long to get your head round it. The app is only available to those who have an Apple product. They are working towards an Android one.

16 Costs. For the Dynamic Planner Risk Profiler VAT per month. This includes - risk profiling, risk profiler app, asset allocation, portfolio suitability hub - fund selection, capital market assumptions & market updates and training & support. Living in retirement module - not available Administrator license - not available For the Dynamic Planner Risk Profiler, Plan & Manage VAT per month This includes - risk profiling, risk profiler app, asset allocation, portfolio suitability hub - fund selection, capital market assumptions & market updates, training & support, investment and retirement planning - goal based planning, holistic planning, cashflow planning, portfolio aggregation, valuations and reporting, branded customer app, financial plan and suitability report library, client management and integrated platform transactions (WelthConnect). Living in retirement module VAT per month Administrator license - available at additional cost Overview. Technology - The system itself is quote up to date with modern technology, it s speedy and is a good use of technology. Comprehensiveness - the questions are really good. They have a 10 and 20 question questionnaire which is Oxford Risk, however they had some complaints about them as some were closed and very specific questions so they created their own 15 question questionnaire. On top of this they also do an investor experience questionnaire and they have a consistency checker for the answers. Usability - the system is in depth and because of this it can be tricky to get your heard around at first, but it is quite easy to pick it up. The user guides are a great help in helping you get to grips with the system. Features - the consistency check is a really great feature from a compliance point of view as it highlights the inconsistent answers. The risk rating is also great and the target managed gold badge funds are also great in ensuring that the fund will not change risk score is another great feature of the system. Scoring system they do have a scoring system which is based on Behavioural Science. This is not shown as it is complex to understand. Once the assessment has been made, the user can then consider the risk reward trade off as the good and bad years are shown for each risk profile. They can then consider a different risk profile perhaps due to

17 need, time frame, specific capacity or indeed in the example below where a couple have different results. Where the decision is made away from the psychometric answer it is conscious, visible and documents so transparent for all to see. Customer service - despite having a rocky start with Dynamic Planner and not being able to arrange a trial with them, we have now had one and the customer service we received this time round was amazing. We couldn't fault them. We Say. Overall, we really like Dynamic Planner and really rate it as a risk profiling tool. The site is easy to use once you get the hang of the cases section and it s comprehensive. Contact: If you want to book a demo with Dynamic Planner, you can do so via this link - If instead you want to have a chat to someone and ask a few questions, then you can contact them by phone, or online contact from. Just click this link -

18 They Say. A2Risk specialise in providing risk profiling and personality tools for a wide range of financial services and technology firms. The company s market leading attitude to risk profiler is used in major UK retirement planning platforms as part of the Moody s Analytics Barrie & Hibbert brand. A2Risk operate on a business-to-business basis, working with investment firms and intermediaries to incorporate risk tolerance assessment into their financial advice process. They do not offer generic risk questionnaires direct to customers. We had a demo with A2Risk but we did not have a trial period with them. This is something that we tried to arrange but so far, we ve had no luck. Pros A2Risk s risk questionnaire takes into account risk tolerance and capacity for loss The questionnaire covers four factors related to attitude of risk which includes investment knowledge, overall comfort with risk, investment preferences and regret. A2Risk perform periodic assessments of their standard questionnaire performance every two years. This is to assess if there has been any shift in overall levels of attitude to risk in the population. A2Risk offer different ATRQ s for different scenarios. They offer questionnaires for accumulation, decumulation, retirement income solver, capacity for loss and high-income investors as they believe one questionnaire doesn t fit all. A2Risk s ATRQ is suitable for delivery as paper-based questionnaires or it can be fully integrated into financial planning software systems, pensions administration, robo-advice solutions and D2C digital distribution. A2Risk provide a high level of customisation and can provide risk categories and category descriptions to meet their customer needs.

19 Cons Their questionnaire is assessed from strongly agree to strongly disagree again another questionnaire with the issue of neither agree nor disagree reflecting the client not understanding the question and their risk assessment not reflecting their risk tolerance accurately. A2Risk is aimed at larger companies and technology firms. Therefore, it will only be available for so many firms. Costs. 15,000 pa for everything included. Overview. Technology - we didn t have a webinar with A2Risk, they sent us information over so we are unable to tell you / assess the technology side of things. Comprehensiveness - the questionnaires both assess risk tolerance and capacity for loss. Usability - the questionnaire assesses the client's investment knowledge, overall comfort with risk, investment preferences and regret. Features - A2Risk is highly customisable for your business and they can provide risk categories and descriptors to meet your needs. Scoring system - we are unaware of any scoring system available. Customer service - the customer service received by A2Risk wasn t great. We had to a few times to receive some information and we never heard back about having a demonstration of the tool. We Say. Overall, if you are a small business then the price for the system is steep so this may not be suitable for you. However, if you a large company and like what they offer, then go for it. Contact: If you want to contact A2Risk and get the ball rolling then you can either contact them on their number or by using their online contact form. Both are available to use via this this -

20 They Say. Oxford Risk offers the option of Personal Accumulation or Personal Decumulation. Whilst it sounds similar to other risk tools, they say it stands out due to the fact it is very customer friendly & it seems the focus is around getting the right answer for the client. Pros Our first impression is how client & user friendly the site was. The layout is really clear and easy to use. We like the three options to provide the client with the risk profile questionnaire. These were; Online via an link, by the post (which is a little old school but not everyone loves technology) & live if you are sat with the client. The questionnaire being ed to the client is very appealing, as it allows the client to complete this in their own leisure time and independently. We really like the option for both personal Accumulation or Personal Decumulation. Both versions have separate sections regarding Knowledge and Experience, also separate questions regarding the client's Financial Personality which establishes the understanding between risk and reward are available. A traffic light system indicates the consistency of the answers which helps to show that the client has answered the questions consistently or if any answers are inconsistent and would need further clarification. Oxford Risk is customisable which allows you to input your own branding onto the risk profiler. It also allows you to configure assessments to reflect how you engage with your investors and personalise questions and scenarios for the investors. Oxford Risk Rating Online intellectual property can be licensed to create your own standalone profiling system, rather than using the web-based platform.

21 Cons Only one client at a time can be entered on the system so if this was a joint case it requires separate questionnaires or notes to clarify if it was the same response for the partner. Costs. When we asked Oxford risk for costs they stated that they offer a more bespoke price structure that will depend upon the users and complexity of the system. We think this is a bit vague but if you like the sound of them, give them a call and they can build a price for you. Overview. Technology - The intellectual property can be licensed to create your own standalone profiling system. In terms of the actual system we ve seen more up to date technology but this is a modern site and we still quite like it. Comprehensiveness - the questionnaire takes into account the client s risk tolerance, capacity for loss and suitability. Usability - The traffic light system helps to identify any inconsistencies within the client s answers and will alert any possible misunderstanding of the answers. You won t have to manually go through the answers yourself. Features - apart from the traffic light system, there is really nothing extra that Oxford Risk offers that really sets them apart from other providers. Scoring system - when going through the system, there was no scoring system, well there wasn t one that was visible to the adviser or the client. We like to see a scoring system as it will show the client where they sit within the risk category and if they would feel more comfortable moving up or down. Customer service - The customer service received was good at the beginning, but we have gone back to Oxford Risk to enquire about costs and we are still waiting for a response from them.

22 We Say. The tool is good in that it is one of the only ones to have an actual process in place to identify any inconsistencies within the in answers given. However, as the questions do not assess capacity for loss and there being no scoring system evident, we didn t rate it highly. Contact: If you wish to contact oxford Risk then you can do so via this link - Or alternatively, you can click this link to get some more information and have a free trial of the system -

23 They Say. Defaqto have over 23 years of experience in data collection and analysis which is why they are trusted by more than 250 brands from 200 companies across the financial services industry who use Defaqtos Ratings. These also appear on the largest price comparison websites such as Aviva, Direct Line, Co-Op and Santander. Defaqto also offers a risk profiling tool, which unlike the others we have tested, uses questionnaires from 4 different providers of risk profiling tools (Oxford Risk, Finametrica, Defaqto and Intrinsic) whilst also offering its own set of questions, to ensure your business are using the correct questions for your client. Pros The use of 4 different risk profiling questions - Oxford Risk, Finametrica, Defaqto & Intrinsic is something we ve not seen from others yet. This is great if for example, you like Defaqtos system but like Finametrica s risk questionnaire, you can have the best of both worlds. The client can be ed the questionnaire which most providers offer, however we still see this as an advantage as ing the client can reduce or even eliminate adviser bias. The system then provides you with the risk profile which comes with a corresponding definition that describes the risk category the client has fallen within. This will allow the client to decide whether or not they think the risk profile matches them accurately and as you can review the answers, it gives the client the chance to change them if needs be. Then you can produce a graph into which you can input the clients target amount, their current investment holdings and their time horizon. This graph will show the clients target amount alongside their capacity for loss (which can be altered on the graph). The graph will also show the projected minimum returns, the mean and the highest possible return. This will allow you to see if the client is on track to reach their investment goal. If the client is not on track to achieve their goal, then you can alter the risk to see if the client needs to take more risk to achieve their goal. The two graphs can then be compared side by side. Engage Core is Defacto s end to end financial planning software which has the flexibility to adapt to your centralised investment proposition (CIP) The system also allows you to create a perfect audit trail. It follows every step. It creates summaries, detail reports and research. This is evidence to show that due diligence has been performed

24 While you hold a licence with Defaqto, you will have training and support included as standard. The Engage Toolkit provides information and supporting documentation online 24/7. Cons We found the layout/system pretty old school and out-of-touch with today s modern technology. We have the same issues again of strongly agree to strongly disagree answers which produces the middle ground of neither agree or disagree which clients tend to use if they don t understand the question being asked of them. It is always good practice to double check answers given, especially those that have been answered neither agree or disagree to make sure the client has fully understood the question. Costs. When asked about costs Defaqto said it varies on a firm by firm basis, they mentioned as a very rough guide that the average per month per user was between per month per user and the higher end was roughly 250 per month per user. Their costs work on a firm basis and therefore there are no fixed costs. Overview. Technology - we found the system a little outdated but the speed of the site was great. Comprehensiveness - they include four different risk profiler tools which is useful to have. If you like defaqto as a system but like FinaMetrica s questions for example, then you can have the best of both worlds. Usability - risk tolerance and capacity for loss are both taken into account regardless of which questionnaire you select to use. Features - the graphs that can be produced with the clients details are really good and clear for the client to understand what they need to do to meet their goals, or if they will actually meet them. Being able to view two graphs side by side is also a really good feature. Scoring system - there is no scoring system visible a such but risk category descriptors are provided.

25 Customer service - the customer service we experienced when dealing with Defaqto was great. They were more than happy for us to go back to them for questions and they were quick to respond. We Say. Overall the site was a little dated but to be honest so are a lot of risk profiler sites, there was a lot of pro s to Defaqto as opposed to cons which is why we have rated it highly. Contact: To contact Defaqto, click this link - you can contact them via , phone or an online enquiry form.

26 They Say. Morningstar are a leading provider of independent investment research in North America, Europe, Australia and Asia. They offer a line of products and services for individual investors, financial advisors, asset managers, retirement plan providers, and institutional investors in the private capital markets. Their mission is: To create great products that help investors reach their financial goals. We accomplish this by working directly with investors, as well as advisors and institutions that serve them. Pros There is a no suitable option option which was requested by advisers to be made available on the tool. This will show when there is no suitable option for the client, so rather than the client ending up in a solution that does not match their needs which may occur with other providers. The risk questionnaire can be printed off blank and filled in with the client, or it can be sent over the client directly via . The Morningstar questionnaire holds the Plain English Crystal Mark, which means the questionnaire is as clear as possible for the intended reader The Quick Tip section below each question is very handy for clients that are completing this on their own, this helps to break the question down to a simpler understanding. We liked how the tolerance for loss shows the illustrated examples of a negative return in s and % and is a good starting point for the adviser to expand on the Capacity for Loss. Cons The Morningstar process is a manual form and unlike other systems will not produce an overall score electronically or indicate if any answers are contradictory to the risk profile chosen. It is still a bit old school in this respect. There is no corresponding definition that describes the risk category the client has fallen within.

27 Costs. Morningstar works on a monthly / annual subscription. For free you get: E-newsletters Alerts on - price changes, company news and portfolio updates Alliance news market news 5 portfolios that can be saved, tracked and analysed Morningstar Stock, Fund and ETF research For 19 a month or 159 annually you can get: E-newsletters Alliance news market news 10 portfolios that can be saved, tracked and analysed. Morningstar Stock, Fund and ETF research Powerful asset allocation tools Downloadable equity, fund and ETF PDF reports Export data to Excel Calculators and Investment idea generators In-depth, quality equity data Alerts on - price changes, company news and portfolio updates

28 Overview. Technology - the system is on the outdated side. The system does not produce an overall score electronically or indicate if any answers are contradictory to the risk profile chosen. Comprehensiveness - the questionnaire takes into account both risk tolerance and capacity for loss. Usability - the Plain English Crystal Mark, which means the questionnaire is as clear as possible for the intended reader. So, it is easier for the client to read and understand the definition of their risk category. Features - there is a no suitable option option for the client which other providers don t have. The quick tip section is also another great feature. Scoring system - - there is not one included within the system as far as we can see. There is also no corresponding definition that describes the risk category the client has fallen within. Customer service - when it came to Morningstar s customer service, they were a lovely company to deal with. We Say. Overall, we wouldn t say to give Morningstar a miss. They do have some good quality features within the system, helping the tool to do its job. It s is mainly the technology side of things that we don t like. Contact: If you want to contact Morningstar, you can do so by clicking on this link -

29 They Say. When completing the advice process with your client, it is crucial to understand your client s attitude to risk. FE believe that with their risk tool, they have created a step by step process which addresses the client s attitude to risk, investment solutions and building the client s report. They also claim the tool to be fully customisable. Pros The tool offers five additional questions that cover capacity for loss. The process cannot with if they are not answered. They are also not tick boxes, they are boxes with room for notes after having a discussion. Each risk profile has an example capacity for loss (which gives you a great starting point) document that details the level of loss and risk inherent in each profile to ensure the investor knows the risks and potential losses involved with agreeing to the risk profile. You can adjust the risk result in the system so you and your client can work through their risk score to ensure they feel comfortable with the amount of risk they are going to take. Within the system you can compare portfolios in terms of holdings and performance. One of FEs biggest selling points is their fund risk rating. They have scored every risk fund from which makes it easier for you to map an investment solution to the client s risk. You can fully customise your client s report. You can tick certain sections of the report you want to remain in or exclude. The end report generates in the background while you are going through the workflow of the tool so you aren t waiting at the end for the report to pull together as it is already has done this. It s great for compliance because every document produced is automatically dated within the system. The tool shows the MPS true performance, no other risk profile does this.

30 Cons While there are 5 level of risk within the system, there are 15 outcomes. This can get confusing and we wonder how you get 15 outcomes which are completely different from one another from just 5 risk levels. The system can get confusing as if you don t use FE then all of the risk scores on each investment can be confusing. It s a comprehensive system but because there is a lot of information available while using the tool, it can become tricky to use. Costs. The risk profiler is 50 + VAT a month for the first license and then 25 + VAT a month per additional license. Overview. Technology - the system is a good use of technology; the system is modern and up to date and runs well overall. Comprehensiveness - the system provides 5 additional questions regarding capacity for loss and the adviser cannot continue through the process unless they insert an answer into the system from the client. Usability - the questions were easy to read and understand from the client s point of view. Features - the fund ratings make it easier to pair up the risk outcome with a choice of fund to invest in. Scoring system - there is a scoring system available to show how the client ended in that risk score as there is a section within the system that reviews the results of the risk questionnaire. Customer service - the customer service we received off FE was great, they always get back to us quickly with any queries.

31 We Say. Overall, we really like FE s risk profiling tool. As a whole is it a good use of technology and is very modern. It s comprehensive as it covers both tolerance and risk well. The fund scores are what sets it apart from others as it makes it easier for you to find a possible fund that will match the client and you can recommend. Contact: Want to contact FE? You can do via the online contact form or there are a list of numbers and addresses, just click this link to see them -

32 Cost Comparison (per month) Users FinaMetrica Synaptic O&M A2Risk Essential Standard Professional One set fee , , , Customised 1, ,200 15, Customised 1, ,500 2,400 15,000 User Dynamic Planner Oxford Risk Defaqto Morningstar FE Risk Profiler Risk Profiler, Plan & Manage Bespoke Bespoke Bespoke Bespoke , Bespoke

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