Risk Tolerance - Willingness Low, Ability High overall

John10

What is the overall risk tolerance?

former

Just rereading Schewer, they appear to say you should only average the two is the required return is very low (ie there are a lot of assets compared to required return), as in this case the client can withstand a large drop in portfolio value before their goals are put in danger.

canadiananalyst

So I will deffo be averaging if I see one of these come up!

IAmNeil

i would say low and then in unique mention that you should try to educate to reconcile differences.

Chuckrox

Interestingly in the Stalla mock there's an individual with high ability and low willingness who they recommend to average.

Valores

It's LOW. You put something in the Unique Circumstances or Return section about meeting with client to discuss their low willingness vs high ability at some later point, but you don't ignore their wishes when writing the IPS.

Colum

it is subjective and I have no idea....
if they are 30 I will choose above
60 choose below



Edited 1 time(s). Last edit at Sunday, May 29, 2011 at 12:01AM by goodman2011.

susana

I guess we should take the more conservative one among ability and willingness...

lcai

it is one of the EOC questions in the CFAI book

pennyless

not even then. If he doesn`t want to take risk you can`t make him can you!! Ability high, willingness low, risk tolerance = low. Can you find a spot in the CFAI which says otherwise.