Client Profiling

Has it ever been more vital to accurately risk profile a client? 2022 markets shocks were described by the Bank of England as ‘almost unprecedented’. Inflation hit a 40-year high. And in 2023, a raised Consumer Duty bar for client outcomes.

The FCA has long warned that failing to match the risk a client is willing and able to take, with the risk of a recommended solution, is a leading reason behind unsuitable advice. Accurate risk profiling has always been a keystone of a client’s financial plan. 

Dynamic Planner is home to the UK’s leading client profiling process, which has been trusted by firms to successfully support more than one million UK investors post-RDR. Rigorously underpinned by behavioural science and the study of human behaviour, it unlocks access to the deepest insight into a client’s risk and sustainability profile.

Built on psychology and statistics

Client Profiling

Combining original and established academic research, Dynamic Planner’s pioneering risk and sustainability questionnaires equip you to accurately capture the complexity of how your client feels, behaves and thinks concerning investing. They are psychometric in their approach, marrying psychology with statistics, and the detailed development and interpretation of data, leading to the final set of questions your clients answer today in Dynamic Planner.

Why those questions? Why not others? Using factor analysis, the team at Dynamic Planner carefully determined which questions, from the many first devised, correlated most effectively and got to the heart of the matter, and which questions ultimately could be deemed redundant and discarded for the opposite reasons. After multiple rounds of testing and retesting, on thousands of UK consumers, the most robust, final set of questions emerged. 

Watch this webinar with Dr Louis Williams

 

  • Market leading client profiling process, supporting 1million+ UK investors
  • Questionnaires built in partnership with Henley Business School
  • Enable your clients to engagingly complete questionnaires remotely
  • Measure a client’s attitude to risk, and their capacity for risk
  • Measure your clients’ attitude to sustainable investing

How is someone’s attitude measured?

Attitude to investment risk is a latent variable, something which cannot be directly or simply measured like someone’s heart rate, for example. To measure effectively, it is important to consider the different factors that influence attitudes to risk. Individually, they provide insight, while combined, they create a clear picture of someone’s overall attitude. Questionnaires also assess a client’s investor experience and their capacity for investment loss.

Dynamic Planner’s attitude to risk questionnaire has three equal measures, which together form a dynamic model used to calculate a score and final profile for your client. In this way, it assesses what motivates people to take risk [drivers], what inhibits risk-taking behaviour  [constrainers] and what the impact is of contextual factors on risk-taking behaviour [enablers]. In tandem, questions are also framed to cover three attitude structures [cognitive, behavioural, emotional] in which attitudes are formed.

Dynamic Planner’s psychometric sustainability questionnaire – a first for the profession when it launched in 2021 – uses the same method, but with a different model which divides a client’s attitude here into five parts: how important it is that values and beliefs are taken into consideration [personal values]; the importance of decisions benefiting others [psychological distance]; how someone feels knowing their investments are having a positive or negative impact [emotional benefit]; the extent in which they would like to ensure their investments have a positive impact [positive impact]; and their willingness to forgo personal returns, for wider benefits [financial considerations].

Digital client profiling

In Dynamic Planner, you can powerfully digitise the client profiling process. More efficient for you; more engaging for your client. At a time and on a device best for them, invite a client to complete any combination of Dynamic Planner’s client profiling questionnaires remotely.

Go a step further. Start to tell a story to your client and bring the process vividly to life in your voice. Tailor wording, the colour palette and profile imagery to reflect your brand and team members, which a client recognises and trusts.

Before they begin to complete a questionnaire, a client can view a 60-second video, supporting their understanding of how the process fits into the bigger picture. For transparency and to change the conversation when you next speak, allow the client to see their provisional risk and sustainability profile upon completion.  

The questionnaires’ genesis

In 2018, Dynamic Planner’s team built on academic research to create a dynamic model to measure your client’s attitude to investment risk. The model was created in collaboration with the triple-accredited Henley Business School, a relationship which in 2022 was rated ‘outstanding’ by government body Innovate UK.

From that foundation, questions were developed, based on academic research, before being tested and retested on different groups of UK consumers, carefully selected to match the demographics of typical end clients in Dynamic Planner. In 2021, the same team repeated the process to create a new questionnaire to capture clients’ sustainability preferences. If your firm wishes to, for your due diligence, you can request to see Dynamic Planner’s due diligence, transparently detailing the process behind how both questionnaires were created.  

Periodically, the questionnaires are retested, using a large but random selection of responses from hundreds of thousands of end clients of advice firms. Investors’ answers are mapped back to the model constructed to first create the questionnaires. Do questions still work in the way that they were intended? Do they remain valid? Reflecting Dynamic Planner’s continual pursuit of excellence, enhancements to the wording of individual questions have been introduced post-2018, but the original foundations remain robustly the same, re-confirming the diligent quality of the psychometric process when the questionnaires were first created.

One, end-to-end system

Dynamic Planner is an end-to-end financial planning system, with access to data uniquely telling both sides of the story. Its risk and sustainability questionnaires can be continually re-evaluated, so you can be certain that what they are capturing remains reliable and valid.

Which final profiles are advisers agreeing with their clients? How are clients, in line with their profile, ultimately investing their money? In what type of investments? Qualitative feedback can be brought to bear too: are advisers telling us that they and their clients are happy with the final outcome?

By powerfully harnessing business intelligence, which has witnessed one million-plus UK investors profiled post-RDR, you can be assured that the outcomes of Dynamic Planner’s questionnaires work in seamless harmony with the system’s asset risk model and 1-10 risk scale.

Before, we completed risk questionnaires with clients during a meeting, but now perhaps 75% of our advisers email the client ahead of it, to complete the questionnaires on their own. That completely changes the conversation and allows you to go to that meeting with a report and talk it through with the client.
Jack Igglesden
Radcliffe & Co
The risk questionnaires are great and do that job really well. We used a different tool before and it was okay, but it doesn’t give you the depth Dynamic Planner provides.
Michael Kennedy
Kennedy Independent Financial Advice Ltd
Bringing in a sustainability questionnaire is a masterstroke from Dynamic Planner. It provides you with a brilliant platform to have those conversations around ESG.
Andrew Watt
Watt Money

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