Client Profiling

Has it ever been more vital to accurately risk profile a client? Post-pandemic markets shocks described as ‘almost unprecedented’. A cost-of-living crisis. And today, a raised Consumer Duty bar for good 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 investment solution, is a leading driver of poor outcomes. Accurate risk profiling remains a keystone of your client’s wealth and financial planning journey.

Behavioural science insights

Adopting both original and established academic research, Dynamic Planner’s risk and sustainability questionnaires equip you to accurately capture the complexity of how your client feels, behaves and thinks concerning investing. The questionnaires are psychometric in approach, fusing psychology with statistics, and detailed data development and interpretation.

Using factor analysis, Dynamic Planner’s behavioural science team determined which final questions, from those first conceived, correlated most effectively and which could be deemed redundant. After rounds of testing and retesting on UK consumers, the definitive set of questions emerged.

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

Assessing client vulnerability today

Today and in line with the Consumer Duty, you can accurately assess a client’s characteristics of vulnerability. Dynamic Planner’s financial wellbeing questionnaire evaluates a client for ‘low’, ‘moderate’ or ‘high vulnerability’ in four areas: health, life events, resilience and capability, as outlined by the 2021 FCA ‘Guidance for firms on the fair treatment of vulnerable customers’.

The questionnaire closely aligns with the algorithm used by the FCA Financial Lives survey, which in 2022 reported that 47 per cent, close to one in two people, were ‘vulnerable’ in at least one of the four above areas.

How do you measure your client’s attitude?

Attitude to investment risk is a latent variable and something which cannot be directly observed like, say, somebody’s heart rate. To measure effectively, it must be divided into parts, which each provide insight and together, paint a picture of someone’s overall attitude to risk.

Dynamic Planner’s market-leading questionnaire has three equal measures, assessing a client’s drivers [underlying motivations], constrainers [personality traits] and enablers [knowledge and circumstance] to taking investment risk. Together, they form a dynamic model to reach a final client profile.

Dynamic Planner’s psychometric sustainability questionnaire was a first for the wealth and financial planning profession upon launch in 2021. It is built on the same philosophy as its risk counterpart, but it uses a different model, dividing someone’s attitude into five parts: personal values; psychological distance [how your decisions benefit others]; emotional [how someone feels knowing their investments are doing good or bad]; positive impact [of their investments on the world]; and financial [willingness to forgo personal returns for wider benefits].

Client profiling in a digital environment

In Dynamic Planner, you can digitise the client profiling process. Efficient for you, engaging and intuitive for your client. Invite your client to complete Dynamic Planner’s risk and sustainability questionnaires remotely, at a time and on a device they prefer. Begin to tell a story to your client and bring the process to life in your brand and your voice.

Before they experience the beautiful UX, a client can view a short video, supporting their understanding. And for transparency and further engagement, upon completion of the questionnaires, allow your client to see their provisional risk and sustainability profile.

Born from ‘outstanding’ academic collaboration

In 2018, Dynamic Planner’s behavioural science team built on validated academic research to create a model to measure a client’s attitude to investment risk. The model was constructed in collaboration with Henley Business School and its ICMA [International Capital Market Association] Centre, a partnership in 2022 rated ‘outstanding’ by government body Innovate UK.

From that model, questions were developed before being tested on consumer groups carefully selected to match the typical UK investor demographic. In 2021, the formula was refreshed to create a questionnaire profiling your client’s attitude to sustainable investing.

Harnessing Dynamic Planner’s unique business intelligence, which encompasses 1.8 million-plus UK investors, the questionnaires are periodically retested. A random selection of client responses are mapped back to the model first constructed to create them, confirming their validity and assuring you of ongoing good outcomes for your clients.

Watch webinar with Dr Louis Williams

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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