Investor risk profile review

Is my investor risk profile standing the test?

A periodically-reviewed investor risk profile –

The features and characteristics of included assets, about which investors should be concerned, include whether –

• the assets maintain a reliable, clearly understood ‘returns’ profile;
• the capital value of the assets moves within acceptable ranges during market changes;
• the liquidity of the assets remains adequate in changing markets;
• the size and duration of any fluctuations in any of these matters is acceptable; and
• there is stability in the management of your investment assets.

Investor risk profile reviews

For several years following the GFC (or The Great Recession, as it is sometimes referred), we noted that –

• a number of clients for whom we undertook an investor risk profile review, recorded
• a profile at least one-step more conservative than had been the case prior to that event.

Clients who had borrowed money to invest in –

• shares,
• managed funds, and/or
• property

prior to that event, often assessed with a profile where gearing their portfolio would be precluded.  (They mostly retained those investments taken out before that event.)

Whilst the GFC was an extreme event, it is important that an investor risk profile review be undertaken periodically to ensure that over the passage of time (in itself, diminishing the time available to achieve goals), events in the investor’s life haven’t altered their capacity – or willingness – to continue investing under the existing profile. Issues such as family changes, debt reduction, health issues can all impact the risk aversion profile.

As a consequence of the investor risk profile review, the appropriate asset allocation can be implemented to ensure that you retain confidence in your investment strategy, can sleep at night – and can still have a level of comfort that your goals for financial independence can be met.

ContinuumFP can help

Are you finding market volatility is stressful?  In particular, are you losing sleep over the performance of your investments (including in your superannuation account)?  Our team of experienced financial planners is available to assist: to make an appointment –

• phone our office on 07-34213456, or
• at your convenience, use the linked Book A Meeting facility.

(This article was originally posted by us in September 2008.  We occasionally refresh/ update it, most recently in July 2025.)