The risk profile of an investor is difficult to gauge because it oscillates with market moods. When the market is on the rise, even the most risk-averse start buying stocks. A sharp correction leads to panic selling, even by risk-takers.


No wonder, the first thing a financial planner wants to know is his client's risk profile. It helps him direct investments. A person's risk profile is a combination of his attitude towards asset classes and his investment tenure and objectives.

Many wealth management companies use psychometric testing. "These tests could be a starting point. But risk profile cannot be mapped without considering the investible amount and the tenure of investments," said Sumeet Vaid, a certified financial planner.



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