The Risk profile tab enables you to compare the portfolio against a contact’s risk profile. In this article, we will go over how to add and compare recommendations against a risk profile.
Accessing the Risk Profile Tab
To access it, toggle over to the Risk Profile tab above the hypothetical graph. Here, you can add your contact’s risk profile or create a new one to add to the comparison.
On the left side of the screen, the asset allocation of the portfolio is compared to the asset allocation recommended by the risk profile according to two criteria: the fund type and the risk level of the funds. The “Target” bar and percentage represent the recommendation, and the “Actual” bar represents the selected portfolio.
Analyzing Product Risk
Let’s look at the fund type. In this picture, you can see that the risk profile recommends investing a minimum of 60% of the size of the portfolio in Income Funds. The current portfolio only contains 25% of its size in Income funds. The red arrow at the right warns you that you should increase the percentage of the size invested in income funds by 35%.
To do that, you can use the right side of the screen. Identify the fund you should invest more in, and reallocate the weights of the funds. Your portfolio now matches the risk profile recommendation.
For the funds risk level, as you can see on this image, the risk profile recommends a minimum of 90% of the size in Medium or less risky funds. Your selected portfolio has 100% of medium or less risky funds, and therefore matches the recommendation.
The work is now done on this panel, you can go back to the performance tab to export your proposal.