Sample interview questions: How do you assess a client’s risk tolerance and investment objectives?
Sample answer:
Assessing Client Risk Tolerance
- Questionnaires: Comprehensive questionnaires can assess risk aversion, investment horizon, and financial goals.
- Scenario Analysis: Present hypothetical scenarios with varying levels of risk and uncertainty to gauge client reactions.
- Cash Flow Analysis: Review income, expenses, and debt to determine how much risk the client can withstand.
- Personality Assessment: Consider personality traits, such as impulsivity, conservatism, and financial knowledge, which can influence risk tolerance.
Determining Investment Objectives
- Client Interviews: Engage in in-depth conversations to understand financial goals, time horizons, investment preferences, and tax considerations.
- Financial History Review: Analyze previous investment statements and transac… Read full answer