The Next-Generation Risk Questionnaire

After hundreds of hours of design, development, advisor input and usability testing, we’re excited to announce the launch of the next-generation Riskalyze risk questionnaire.

There are three big innovations in the next-generation Risk Questionnaire.

Two Versions of the Questionnaire. You’ve seen our existing quantitative approach, built on Nobel Prize-winning science, that captures a detailed Risk Fingerprint for each client. Now advisors can choose a simplified version for clients who might be elderly or have simpler needs. And it’s just as easy as ever to engineer portfolio risk to fit those clients.

image

RQ, Phone Home. Now your clients can answer the Risk Questionnaire with a few taps on their iPhone, Nexus 5, Samsung Galaxy, Moto X or other Android device. It’s a beautiful design, and if they get stuck, they can email or call your office with a single tap. (Of course, the Risk Questionnaire has always worked on iPad or Android tablets.)

image

Using Risk to Generate Leads. With a simple link or a few lines of code, you can embed the Risk Questionnaire into your own web site, creating a new way for prospective clients to engage with your firm, send you their risk tolerance, and ask for a portfolio analysis to see if they’re on the right track. With a few clicks, your web site transforms from a brochure into an active tool that generates new business.

image

The new Risk Questionnaire is live for all Riskalyze customers as of today. The Lead Generation version will be activated for customers over the course of the next week.

To join a guided tour and see Riskalyze in action, just click here to RSVP.

Math > Stereotypes

By Mike McDaniel, Chief Investment Officer

“A man has got to know his limitations.” —Dirty Harry

The first time I saw the technology at the heart of Riskalyze, I became a believer.

I was 30 years old, with the majority of my investment capital in FDIC-insured investments. For years, I bucked the conventional wisdom that I should be more aggressively allocated simply because I was young. My fellow advisors would say, “look, you’ve got plenty of time to recoup if it takes a dive…you should be fully invested in stocks at your age.”

Perhaps I’ve been risk averse since birth, or maybe it was that my career as an advisor began amidst the dot-com crash, but I’ve always had a deeply-rooted aversion to risk.

I trudged along, invested very conservatively, all the while second guessing myself. Worse yet, there were times (most often at market tops) that my emotions would convince me to invest outside of my risk tolerance. Then came the inevitable market drop, I got worried, and I’d sell for a loss.

Then it happened. I completed my first Riskalyze questionnaire and my Risk Number was 30. The mathematician monitoring my answers thought something was wrong with the math. Could I really be a 30 at my age? Could I really be content with that kind of portfolio? Could it be that taking more risk than that puts me in an emotional state where I make stupid decisions?

The answer was YES to all three questions.

For the first time ever, a risk questionnaire nailed my risk tolerance and confirmed what my gut had been telling me for years. I am always happy to trade upside potential to protect myself from downside, and almost all of my bad investing decisions have come from being invested outside of my comfort zone.

I’ve been using Riskalyze methodology to measure my risk tolerance for just about six years now. My Risk Number has been extremely consistent, ranging between a 29 and 32. Knowing this has been incredibly powerful for my investing.

Ultimately, my experience taught me something very powerful: math is greater than stereotypes. I feel empowered with the ability to keep myself invested over the long run, and I know it’s producing better results than if I let stereotypical risk tolerance suck me into the “buy high, sell low” cycle again.

Using Investment Clubs to Win New Clients

By Michael McDaniel, Chief Investment Officer

Many advisors get an invitation to an investment club, and turn them down. “Why would I go share my knowledge with a bunch of guys who think they are fine managing their own money? Forget this.”

Don’t turn down that next invitation. Let’s leverage it to win a bunch of new clients.

One of my clients belonged to such a club, and she asked me to “look into a stock” that her club was thinking about adding to their portfolio. I asked a few questions and discovered that her club included about 40 high net worth households who enjoyed getting together at a local restaurant to discuss wine and stocks. (Who doesn’t like to mix dividends with a dry Riesling?)

I offered to provide a fundamental analysis of the stock in question, a risk review of the club’s existing portfolio, a risk tolerance analysis for each club member, and a demonstration of the risk questionnaire for the entire group at their next meeting.

Taking the podium a few weeks later, I felt fully armed. Running through the risk questionnaire was a hoot. Presenting the results was exciting and generated a lot of discussion. And the discussion got even more animated when we looked at the six month probability range for the club’s portfolio.

Suffice it to say, club members got the distinct impression that I was more than just a guy hawking mutual funds who kept 100 bps of their money. For the first time, they saw that their advisor could offer tremendous value as a risk manager. My signup sheet was full of members who wanted to give their personal portfolio a risk review.

I went to those meetings with ACAT forms in hand…and I wasn’t disappointed.

Pathway and Riskalyze Partner to Align 401Ks with Investor Risk Tolerance

We’re excited to announce yet another new partner. It’s not every day that two companies in the same city get the chance to make history together. We’re proud to be working with Pathway, which was founded by the co-CEOs of the iconic Hanson McClain Advisors.

SACRAMENTO — Two Sacramento-area firms, Pathway Strategic Advisors and Riskalyze, today announced they have formed a strategic partnership intended to revolutionize the way retirement plans are invested. Pathway is rolling out Riskalyze Pro as the business development, proposal and risk management system for all of Pathway’s retail channel advisors.

Pathway was founded by Scott Hanson and Pat McClain, co-CEOs and founders of the Sacramento-based investment advisory firm Hanson McClain Advisors, known for innovative practice management and investment solutions. Pathway was created to help participants with 401(k), 403(b) and 457 retirement accounts maximize the money in their employer-sponsored defined contribution plans.

Riskalyze’s patented Risk Number™ technology will assess the risk tolerance of each Pathway client, allowing solicitor advisors to more precisely align those clients with their closest Pathway model portfolio. Riskalyze will also help Pathway advisors to better demonstrate the relative risk between clients’ existing 401(k) allocations and the benefits that the Pathway approach can bring to their investments.

"Riskalyze is yet another example of how Pathway is committed to combining high quality investments with the latest technology to deliver a sustainable advantage to our clients and advisor network," said Scott Hanson. "It’s long past time that 401(k) investors had the same level of access to professional investment advice as do general market investors, and Pathway is committed to helping them receive that level of guidance."

"Scott Hanson and Pat McClain are well known both locally and nationally," said Riskalyze CEO Aaron Klein, adding, "We’re proud to partner with such an innovative team, working through both the retail and advisory channels to strengthen this country’s retirement future."

Riskalyze is the company that invented the Risk Number™, the first-ever quantitative system for identifying client risk tolerance, aligning portfolios to client expectations, and quantifying the suitability of investments. Riskalyze works with RIAs, hybrid advisors, independent broker-dealers, RIA networks, custodians, clearing firms and asset managers to better align investments with the tolerances and expectations of individual investors.

A One-Click Roadmap for Your Clients

image

The role of an advisor is a paradox. On the one hand, clients want their advisors to “take care of their money,” but on the other hand, it’s impossible to do that job without engagement, agreement and buy-in from those clients.

One way that advisors have been building that engagement is to use an Investment Policy Statement to discuss and build agreement about the direction of a client’s portfolio. The IPS illustrates the facts we know about the client, and showcases the direction we’re going to take a client’s investments.

Today, we’re excited to announce that Riskalyze now makes it possible to create this roadmap for your clients with a single click. We’ve built a printable Investment Policy Statement that is simple and understandable, yet includes all of the key elements advisors need in that document.

And here’s the best news of all. While the Investment Policy Statement will be an add-on product in the future, every single Riskalyze customer just got a lifetime upgrade to the IPS — completely free. And for a limited time, every new advisor who joins Riskalyze will get the lifetime upgrade, too.

There may be some advisors who have more comprehensive needs in an IPS document. We made the choice to err on the side of simplicity for a key reason — the best guidance we have from FINRA is that understandability trumps detail every time.

That being said, we’ve already provided customization services to several customers. If you’d like to do the same, let us know and we can make it affordable to get exactly the report you want for your business. (We also intend to increase your ability to customize the report over time.)

We’ve also shipped a variety of other improvements all over Riskalyze.

  • Reports now generate in PDF, making it easy to save any report into your CRM, or send it to your clients electronically. (This is live for some customers, and will be rolling out to all customers over the next few days.)
  • Client profiles were redesigned to make it simpler and easier to manage client portfolios.
  • We added a self-completing checklist for prospect meetings and client reviews, so you can see what’s next for each client at a glance.

Finally, we’re excited to share that we’re making some big investments in your success. We’re in the process of hiring a new team member to run Advisor Success, allowing us to deliver even more training, support and assistance to make you a more successful advisor.

We’ve also rolled out the ability to RSVP for any of our upcoming Advisor Success events right inside the product. Just click on your own name in the upper right hand corner, and click Help. Then choose the Advisor Success date you’d like to join us for, and you’ll get an email with the link to join the online event that day!

Just about all of these improvements and new features are now live for all Riskalyze customers. If you’d like to learn more about how we turn risk into an advisor’s best friend, RSVP to join us for a guided tour.

We’re excited to be a small part of your success!

© 2014 Riskalyze, Inc. All Rights Reserved. All trademarks are owned by their respective companies.