How to define investment risk profiles
Successful investing requires an understanding of the fundamental risk and return relationship - the more risk you take, the higher your returns are likely to be in the long term. And the higher the long-term returns, the more volatility you may have to endure in the short term.
The BT Risk Profiler tool draws these factors together by helping you understand how you feel about risk. It provides guidelines that may help you determine how to allocate the funds you have available for investing among the major asset classes (i.e. shares, property, fixed interest and cash).
It will:
- Help you understand how you feel about risk
- Provide an illustration of how, given a particular investment risk profile, you could choose to allocate the money you have available for investment between the various general asset classes (i.e. shares, property, fixed interest and cash).
What investment risk profilers do and don't do
An investment risk profiler is a tool that can assist you clarify your understanding of your tolerance to risk.
It does not provide you with financial advice about any particular financial product or class of financial product. Rather, it gives you a general illustration about how people with certain risk profiles may choose to allocate their funds available for investing among the major asset classes.
An investment risk profiler is not a substitute for a financial plan. It does not take into account all your individual investment objectives, existing financial situation or particular needs. It also doesn’t help you select financial products or strategies that suit your needs and your investment risk-return preferences. All these should be considered before making any investment decision.
You should also consider whether the results of the Risk Profiler are appropriate, bearing in mind all aspects of your individual financial situation. This may include existing financial commitments and other financial assets you own. To the extent that this risk profiler does contain general advice, you should read the relevant Financial Services Guides (FSGs) for the entities in the BT Financial Group.
View the BT Risk Profiler.
The importance of obtaining professional advice
Before making any investment decision, we recommend that you speak with a financial adviser who can make a detailed assessment of your financial situation, help you define your investment goals, and select financial products and strategies that suit your risk and return preferences.
Learn more about Risk
- What is investment risk?
- What types of investment risk are there?
- What is my investment risk profile?
- How can I make low-risk investments?
Did you know?
There are a number of different types of risks that may affect your investments. Understanding these risks, how they work and their potential impact will help assess your own attitude to risk.
It’s difficult to make investments risk-free. If it wasn’t, everyone would be in a risk-free investment. You can however, minimise investment risks by adopting some proven strategies
