Demonstrating Tolerance For Loss
We are currently reviewing our Risk Profile wording and was wondering how people demonstrate a client's Tolerance for Loss.
We use the FE Risk Profile and while this is helpful in demonstrating Capacity for Loss, there is not really any assessment of Tolerance for Loss.
We currently have wording along the lines of:
You have confirmed you can tolerate losing X%, based on your portfolio value of £X , this would mean a loss of £X.
This information derives from the Adviser's discussion with the client.
Would like to know if there are any other methods/process that could help.