Your risk profile explained

Although every investor is unique, it is possible to categorise someone’s attitude to risk using proven psychometric profiling techniques.

Psychometric profiling identifies characteristics such as tolerance for ambiguity, desire for profit and investment experience. These are all general predictors of an investor’s likely tolerance for risk and provide a good indication of how they may feel about taking a risk with that investment.

Using psychometric risk profiling to determine the risk an investor is willing to take typically involves asking them to completing an attitude to risk questionnaire (using a paper-based questionnaire or one of the popular Dynamic Planner risk profiling apps).

What is a Dynamic Planner risk profile?

Each Dynamic Planner risk profile represents a proportion of the population.

dynamic planner risk profile population distribution

The chart on the right helps you see where you sit in your risk profile versus other investors. The taller bars represent the more popular risk profiles.

Every Dynamic Planner risk profile also has a unique name and description.

To ensure clarity, all descriptions use simple language that has been clarity-approved with a Crystal Mark from the Plain English Campaign.

Dynamic Planner risk profiles

These descriptions cover:

  • Your willingness to accept risk
  • How comfortable you are with the possibility of losing money on your investments
  • How much you want to invest in higher-risk investments to get better returns
  • Expected performance figures for below average performance, average performance and above average performance.

Your financial planner can provide you with the description for your chosen risk profile.