Risk profiling and fund selection in Engage

The risk profiling and fund selection functionality within Defaqto Engage allows the user to define the client's mandate and then match a suitable investment portfolio to that mandate.

Defining the client mandate is made up of the following considerations:

  • Attitude to risk the client's natural attitude to risk is defined by a psychometric questionnaire and determines the individual's approach to risk
  • Required risk this is the amount of growth that is required of the investment. Several factors impact this, including the start and end of the term, the level of regular investment over the period and the timescale over which the growth needs to be achieved 
  • Capacity for loss  this refers to the ability of the investor to absorb falls in the value of their investment 

Once all of this has been addressed, you are able to determine an agreed attitude to risk for the client. We have created 10 risk profiles that can be used to summarise clients’ mandates in most circumstances.

From here, you can then select suitable funds for your clients by:

  • Using Defaqto Risk Mappings and choosing a fund from a range of mapped risk-bound multi-asset solutions
  • Selecting single-asset funds to meet Defaqto target asset allocations
  • Building your own fund portfolios to match investment strategies at firm or individual level

Already a Defaqto Engage user? Access free training and support to help you maximise the benefits of its risk profiling and fund selection module.

New to Engage? Request a free trial

Share this