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Risk-tolerance surveys often miss what financial advisers really need to know about you

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Risk-tolerance surveys often miss what financial advisers really need to know about you

Within the early days of economic planning, advisers would assess a consumer’s angle about threat. It was largely a subjective judgment. However, their conclusion (or hunch) would information their portfolio administration selections on behalf of that consumer.

Along with probing to find out a consumer’s tolerance for threat, advisers may take into account one’s age, gender and funding expertise earlier than assigning labels resembling, say, “extremely conservative” or “reasonably aggressive.”

These days, evaluating a consumer’s threat tolerance is a giant a part of an adviser’s job. Other than matching funding suggestions to suit a consumer’s preferences, advisers should present trade regulators that they’re fulfilling their fiduciary obligation to serve a consumer’s finest pursuits.

If an adviser have been to hype high-risk funding merchandise to a risk-averse consumer who prioritizes wealth preservation, for instance, it may create compliance complications. And disgruntled purchasers may stop and discover one other adviser.

Over the previous decade, many distributors have launched tech platforms to assist advisers establish a consumer’s threat tolerance. Surveys are common: For a lot of advisers, a part of the onboarding course of includes administering a questionnaire to new purchasers about their threat/reward calculus.

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Some longstanding risk-tolerance measures embrace Riskalyze, which assigns a “threat quantity” to every consumer, and FinaMetrica. Some advisers rave about these instruments. They follow these threat profiles by means of thick and skinny and use them to information their recommendation amid market swings.

Jamie Lima, an authorized monetary planner in Ramona, Calif., makes use of DataPoints to get a greater sense of purchasers’ monetary persona. He likes how its concentrate on psychology helps uncover one’s cash mindset. “It’s extra behavioral finance, not ‘Price this on a 1-to-10 scale,’” he mentioned. “Its questions are extra EQ [emotional quotient], not IQ [intelligence quotient].”

Others are extra skeptical of those instruments. They could have considerations concerning the survey design, the character of the questions or their total effectiveness in precisely predicting how an investor will react to dangerous bets.

“I used a risk-tolerance questionnaire for a couple of 12 months,” mentioned Noah Damsky, a Los Angeles-based adviser. “It was so imprecise. How a consumer views threat can change from at present, tomorrow and 10 minutes from now. That’s as a result of it’s an emotional response, and feelings can change.”

Damsky additionally discovered that purchasers disliked finishing the surveys. Some discovered the questions complicated. For instance, he remembers purchasers balking at questions on how a lot of a monetary hit they’d settle for to their portfolio. Mystified purchasers would ask Damsky, “Why would I be keen to lose 10%, or 20%, or no matter p.c?”

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Furthermore, he rejects the argument that administering these surveys from 12 months to 12 months permits advisers to trace modifications in a single’s threat tolerance. “It’s like once you get your annual bodily and it’s a must to fill out all these [patient] types yet again,” Damsky mentioned. “It appears like a formality that basically appears like a waste of time.”

By way of the common monetary planning course of, Damsky beneficial properties adequate perception into every consumer’s threat tolerance — with out the necessity for surveys, digital platforms or different supplemental instruments. If purchasers are strongly adversarial to debt, as an example, he finds that they are typically risk-adverse normally.

Like Damsky, Zachary Scott has reservations about counting on risk-tolerance instruments. “Purchasers’ angle towards threat undoubtedly modifications with totally different market circumstances,” mentioned Scott, an authorized monetary planner in Catonsville, Md. “However risk-tolerance questionnaires are very static.”

When assembly new purchasers, Scott examines their portfolio for clues about their threat stage.  One opening query: “Why are you invested in the best way that you just’re invested?” Says Scott: “Understanding their objectives and discovering out what they’ve finished prior to now provides me a much better understanding of their threat tolerance.”

Additionally learn: Money is now not trash, says Ray Dalio, who calls it extra enticing than shares and bonds

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The Future of Fund Finance | Insights | Mayer Brown

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The Future of Fund Finance | Insights | Mayer Brown
Deal Catalyst’s annual The Future of Fund Finance U.S. conference will be taking place on June 9th at the New York Marriott Downtown. This one-day event will explore how alternative funding structures have grown in popularity thanks to their dual nature as both a financing tool for fund managers and as an attractive alternative asset investment opportunity for institutional investors alike.

Mayer Brown partners Ann Richardson Knox and Angela Ulum will be joining this year as event speakers. Ann will be moderating a conversation on “The Spectrum of Structures in Fund Finance” while Angela will be a panelist discussing “How Securitization is Playing an Increasingly Larger Role in Fund Finance.” For more information, please click here.

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Gen X struggle to save for retirement in ‘perfect storm’ of financial worries

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Gen X struggle to save for retirement in ‘perfect storm’ of financial worries

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While Generation Z complain about increasing rent prices and millennials worry over childcare costs, it is the so-called forgotten generation that have arguably been plunged into the most difficult financial position.

Generation X — typically those born between 1965 and 1980 — are dealing with a flurry of financial worries, as they juggle handling pension savings, supporting family members and paying off increasing debts.

Craig Rickman, pensions expert at Interactive Investor, said: “Gen X’s finances are being squeezed by the perfect storm of rising education fees, spiky utility bills and higher mortgage costs.

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“Many may struggle to find surplus savings and/or income right now to beef up their retirement savings to the required level,” he added.

Only 28 per cent of Gen X are on track to meet their retirement savings goal, which could be due to the phasing out of defined benefit schemes as they entered the job market, according to research from Annuity Ready.

“An interesting trend that may impact Gen X’s financial security in retirement is the gradual demise of the defined benefit pension schemes in the private sector,” said Rickman.

These “gold plated” defined benefit pensions allow employees to receive a guaranteed inflation-proofed income for life, based on salary and years of service.

In contrast, a defined contribution scheme is not guaranteed for life, where the employee builds up a pot of money through a workplace or personal pension scheme, which is subject to the value of investment returns.

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The Financial Conduct Authority’s Financial Life Survey for 2024 found 65 per cent of adults who were either receiving an income or had taken a cash sum from a pension had accessed a defined benefit scheme.

However, only a third of workers aged 45-54 — Gen X — were in a defined benefit scheme compared with nearly two-thirds in defined contribution schemes.

“That’s a stark shift and means a smaller proportion of Gen X compared to Baby Boomers [who] can effectively sleepwalk to retirement knowing that a guaranteed, life-long income awaits them,” said Rickman.

In addition, many in Gen-X have been squeezed by having to support their children and parents at the same time, turning them into the “sandwich generation” as they become not only “the bank of mum and dad” but also “the bank of son and daughter”, according to data from wealth management firm Saltus.

Parents are assisting their children in getting on to the property ladder, purchasing their first car and dealing with rising university fees, while also supporting the older generation with day-to-day living costs, including utility bills, medical care and shopping, Saltus said.

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For those providing financial support to elderly relatives with more complex needs, the cost of both residential homes and nursing homes have risen to a weekly average of £1,400 and £1,500 respectively, based on data from care home finder Lottie.

And it is not just Millennials and Gen Z who are feeling the pressure of soaring house prices. With wages failing to keep in line with the rising cost of homes, Gen X has been forced to borrow more, says Rickman.

While this was more manageable during times of low interest rates, as they have increased along with repayments, disposable income and savings have taken a hit.

However, it is not too late for the forgotten generation to prepare for retirement, if they create a clear plan of how to save.

Claire Exley, head of advice and guidance at online wealth management company Nutmeg, says despite the negatives of defined contribution pensions, auto enrolment in schemes offers flexibility and “comes with more choice” over investments and additional contributions.

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“Financial planning and advice is key,” Exley concludes.

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Weekly Recap: 15 Finance Press Releases You Need to See

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Weekly Recap: 15 Finance Press Releases You Need to See

A roundup of the most newsworthy financial press releases from PR Newswire this week, including GoDaddy’s Most Entrepreneurial Cities of 2025 and new AI agents from Workday.

NEW YORK, May 23, 2025 /PRNewswire/ — With thousands of press releases published each week, it can be difficult to keep up with everything on PR Newswire. To help finance journalists and consumers stay on top of the week’s most newsworthy and popular releases, here’s a recap of some major stories from the week that shouldn’t be missed.

The list below includes the headline (with a link to the full text) and an excerpt from each story. Click on the press release headlines to access accompanying multimedia assets that are available for download.

  1. WesBanco, Inc. Expands Regional Presence with Conversion of Premier Financial Corp.
    Marking the largest conversion in the bank’s history, WesBanco, Inc. announced the successful customer transition of approximately 400,000 consumer and 50,000 business relationships, along with the branding and operations of approximately 70 financial centers, from Premier Financial Corp. to WesBanco.
  2. The Most Entrepreneurial Cities of 2025 Prove Size Doesn’t Matter
    New GoDaddy data reveals unexpected hotspots fueling the United States’ entrepreneurial spirit, revealing that both small and large cities are driving innovation.
  3. Finastra to Sell Treasury and Capital Markets Division to Apax Funds
    Upon completion of the transaction, Finastra’s Treasury and Capital Markets (TCM) business will be rebranded and operated as a standalone business. With a client base of over 340 financial institutions, TCM is a trusted enabler of risk management, regulatory compliance, and capital markets operations.
  4. Workday Unveils Next Generation of Illuminate Agents to Transform HR and Finance Operations
    “The key to unlocking real business value with AI is to actively reshape the very core of how businesses operate,” said Gerrit Kazmaier, president, product and technology, Workday. “Workday is helping our 11,000+ customers in that transformation by leveraging our deep HR and finance expertise to deliver agents that provide measurable business value and empower them to thrive in the future of work.”
  5. Record-Breaking World Liberty Financial USD1 Stablecoin Unlocks Cross-Chain Capabilities With Chainlink
    Backed by short-term U.S. government treasuries, U.S. dollar deposits, and other cash equivalents, the USD1 stablecoin has skyrocketed in record time to eclipse $2 billion in market capitalization.
  6. Deloitte: Americans Plan to Travel More This Summer, but Trips May be Less Extensive
    According to Deloitte’s 2025 Summer Travel Survey, more than half (53%) of Americans surveyed plan to travel and stay in paid lodging this summer, up from 48% last year. Many are making it work by taking more frequent, but shorter, trips. Americans continue to prioritize leisure travel, despite economic headwinds that may send summer travel plans in a new direction.
  7. Caregivers Face Lasting Financial, Emotional and Career Impacts, Edward Jones Study Finds
    Two in five U.S. adults identify as family caregivers, but there is a lack of support for caregivers nationwide, according to new research from Edward Jones in partnership with Morning Consult and Age Wave. Top financial concerns caregivers face include rising costs and inflation (56%) and inadequate retirement savings (42%).
  8. PNC Bank Agrees to Acquire Aqueduct Capital Group to Complement Harris Williams Capabilities
    “This acquisition is complementary to existing capital advisory capabilities provided through PNC’s subsidiary Harris Williams and will enable us to expand our ability to serve the global capital needs of the private equity industry,” said Michael D. Thomas, head of Corporate & Institutional Banking at PNC.
  9. Fisher Investments Launches Fiduciary.com™: A New Resource to Help Investors Better Understand the Wealth Management Industry
    Fiduciary.com provides investors with straightforward education about what a fiduciary is and isn’t, competing standards of care in the industry, and what to look for when hiring a wealth manager.
  10. GM enhances loyalty program and unveils new GM Rewards™ Mastercard® from Barclays
    The revamped loyalty program is simpler, and the new card provides customers more ways to earn and redeem GM Rewards points across GM brands for new vehicles, services, parts and accessories.
  11. Southwest Gas Holdings Announces Launch of Secondary Public Offering of Centuri Holdings, Inc. Common Stock
    Southwest Gas Holdings, as the selling stockholder, is offering 9,000,000 existing shares of Centuri’s common stock. Southwest Gas Holdings expects to grant the underwriters a 30-day option to purchase up to an additional 1,350,000 shares of Centuri’s common stock.
  12. Introducing CHASM: A Solution to Close the Gender Gap – Powered by the World’s Most Successful Men & Women
    Powered by an invite-only membership, CHASM is a club of the most successful men and women in the world (each contributing $25,000 annually) that transforms their capital into change by helping women founders thrive. “With CHASM, we’re tackling the gender gap in an innovative way — by not isolating men, but by inviting them in. If 99.9% of the power, money, and influence still sits with men, they need to be part of the solution,” says CHASM founder Daniella Pierson.
  13. Papaya Global Launches the First Enterprise Platform for Managing and Paying Global Contingent Workers
    Papaya’s new platform – Contingent OS – is the first enterprise-grade solution built to unify the full external workforce lifecycle. It connects the dots between vendor management systems (VMS), payroll compliance, invoice verification, and instant global payments – enabling true end-to-end orchestration for contingent workforce programs at scale.
  14. Synchrony Partners with the Independent Animal Hospital Association (IAHA) to offer CareCredit, Spotlighting Commitment to the Nation’s Independent Veterinary Hospitals
    As the Independent Animal Hospital Association’s (IAHA) preferred financing partner, Synchrony’s CareCredit health and wellness credit card will be offered at the association’s more than 500 independent animal hospitals in more than 30 states.
  15. Vanguard Releases New Book on Forces Shaping the Future Global Economy
    The new book, Coming into View, introduces a groundbreaking, quantitative method in assessing the impact of megatrends on the global economy. The book offers bold new perspectives on the effects of AI, deficits, and demographic shifts for investors, financial advisors, and business leaders.

For more news like this, check out all of the latest finance-related releases from PR Newswire.

Do you have a finance press release to distribute? Sign up with PR Newswire to share your story with the audiences who matter most.

Helping Journalists Stay Up to Date on Industry News

These are just a few of the recent press releases that consumers and the media should know about. To be notified of releases relevant to their coverage area, journalists can set up a custom newsfeed with PR Newswire for Journalists.

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Once they’re signed up, reporters, bloggers, and freelancers have access to the following free features:

  • Customization: Users can create customized newsfeeds that will deliver relevant news right to their inbox. Newsfeed results can be targeted by keywords, industry, subject, geography, and more.
  • Photos and Videos: Thousands of multimedia assets are available to download and include in a journalist or blogger’s next story.
  • Subject Matter Experts: Journalists will have access to ProfNet, a database of industry experts to connect with as sources or for quotes in their articles.
  • Related Resources: Our journalist- and blogger-focused blog, Beyond Bylines, features regular media news roundups, writing tips, upcoming events, and more.

About PR Newswire

PR Newswire is the industry’s leading press release distribution partner with an unparalleled global reach of more than 440,000 newsrooms, websites, direct feeds, journalists and influencers and is available in more than 170 countries and 40 languages. From our award-winning Content Services offerings, integrated media newsroom and microsite products, Investor Relations suite of services, paid placement and social sharing tools, PR Newswire has a comprehensive catalog of solutions to solve the modern-day challenges PR and communications teams face. For 70 years, PR Newswire has been the preferred destination for brands to share their most important news stories across the world.

For questions, contact the team at [email protected].

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