At Armor, one of the areas that we consistently strive to improve is our communication style. To me, perhaps the most important part of communication is listening – more specifically, making sure our clients trust that we are hearing what they have to say. Fortunately for us, as 21st century risk managers, technology has provided more tools than ever to evaluate and constantly audit how we’re doing.
Much ink and many trillions of pixels have been spent discussing risk tolerance, risk capacity, and how one person or family can find acceptable levels of risk and reward, while still meeting long-term objectives. Communication around this topic is essential to making sure we are doing right by those who have trusted us to manage their accounts. If you’re a client of ours or have just stopped in for a portfolio double-check, you’re probably already familiar with our Client Investment Profile, which helps guide discussions about the balance between volatility, long term growth, and current income. While the Profile is not going anywhere (in fact we like to re-visit it at least annually with our clients), we are now able to collect another data point– the Risk Number – to help us continue to know you better.
Your Risk Number starts with a quick questionnaire that helps us understand your risk tolerance by posing a series of hypothetical portfolio results for you to react to, based on a six month time horizon. There are no right or wrong answers, but the goal is to show you real dollar numbers over a foreseeable but not immediate timeframe, and get you thinking. After the questionnaire, Armor will get a report back in the form of a speed limit sign that will help us make sure your portfolio matches your investment goals and expectations. This allows us to better frame questions and listen actively in our next meeting. It is important to note that your Risk Number is only one part of the puzzle –just like the speed limit is only one part of a long road trip – and Armor is here to help you focus on the whole picture. We know that different buckets of money come with different goals and therefore different time horizons, so your overall financial plan is our map. While no one can predict the future, we can hedge against some risks by collecting as much information about your goals as possible. You are always in the driver’s seat, but we are seeking to be the best navigators that we can be. The Risk Number is one more tool to help us figure out how to get you where you’re trying to go.
If you haven’t taken the questionnaire yet, and you’d like to, click the button below or you can email me and I’ll send you a personalized link. We are also available to discuss your portfolio’s asset allocation and your personal risk tolerance at any time.