The UK’s First Multi-Questionnaire Risk Profiling Tool is Deployed to Advisers at Park Row Associates
Reading, UK, 9th May 2006 – Distribution Technology Limited (DT), the UK’s leading provider of advice technology, has today announced the launch of Dynamic Risk Profiler, the company’s new risk profiling tool.
Dynamic Risk Profiler enables advisers to improve the accuracy with which they can assess a client’s attitude to risk and their ability to deliver sound investment advice. The tool has been developed from a 6 month research project by Distribution Technology, with analysis completed by the Psychometrics Centre1 and field-work undertaken by GfK NOP.
Most current risk profiling solutions rely either on self-diagnosis by the investor or on a relatively high level of investment knowledge or concepts. Developed with all segments of the population in mind, Dynamic Risk Profiler requires no prior knowledge of financial services terms or quantification of acceptable loss and is therefore suitable for the entire market, regardless of their level of financial education. This is the first time that a risk profiling tool has been developed for UK advisers and benchmarked against the UK population to ensure its suitability for the UK and its statistical reliability.
Park Row, a Royal Liver Company, one of the UK’s largest financial services distributors and one of DT’s oldest customer’s, have – initially – implemented Dynamic Risk Profiler in their multi-tied division, with the option for roll-out to their independent advisers at a later stage.
John Butterfield, Marketing & Communications Manager, Park Row, comments:
Distribution Technology has a reputation for market-leading advice technology. Dynamic Risk Profiler is being used as a core part of the advice process; bringing consistency to the business in terms of risk profiling and asset allocation. This will support the business in its aim to meet and beat the regulator’s requirements under TCF.
Ben Goss, Managing Director, DT, says:
Risk profiling is one of the biggest issues currently facing large distributors providing investment advice. We are delighted that Park Row Associates have adopted Dynamic Risk Profiler. Their advisers are benefiting from new levels of analysis and improved adviserinvestor understanding; resulting in richer and deeper relationships.
Uniquely, DT’s Dynamic Risk Profiler allows advisers to select the length of questionnaire they wish to use, trading off time spent in asking profiling questions and questionnaire reliability. Three questionnaires have been developed with 5, 18 or 24 questions each providing a three page report for the customer explaining their profile based on the research.
Goss continues:
The flexible nature of Dynamic Risk Profiler means that there is a questionnaire to suit every investor. A balance can be struck between length of questionnaire and accuracy, using a shorter questionnaire for simpler cases and a longer questionnaire for more complex, high net worth clients.
Distribution Technology’s Dynamic Risk Profiler has been built upon psychometric principles which are used to reliably measure an individual’s abilities, attitudes, and personality traits. Reliability is critical to consistent advice therefore the research examined a broad and statistically representative sample to of the UK adult population.
Dynamic Risk Profiler benefits both the client and the adviser during the advice process. For the adviser, DRP delivers the opportunity to understand a client’s attitude to risk in detail and construct more suitable investment strategy recommendations. For the client, DRP enables a better understanding of their attitude towards risk and together with the adviser, take responsibility for their financial decisions.
1 - The Psychometrics Centre is a leading provider of psychometric services based at City and Cambridge Universities
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