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Why Financial Advisors are asking so many questions

Web based investment advisors such as Simplewealth and traditional investment advisors have a lot of differences in terms of speed, reliability and 24/7 accessibility.

Yet there is one thing they have in common: they both ask a lot of questions on their clients financial situation. There are two reasons for this: regulation and better service.

Some of those questions are required by the Swiss financial regulators to ensure the products sold are matching the client needs. Especially, questions around capacity to take risk i.e. how much money the client has overall, how many people are dependent on the client (e.g., kids, partner staying at home, aging parents) and how much is usually spent. Regulators want to ensure the products sold are suitable for the clients. Especially, before the financial crisis, some risky, unsuitable products were sold to clients looking for a safe investment. Thus, regulators around the world and especially in Switzerland are now asking for a proper "risk profile".

And there is a second angle to it: at Simplewealth, we ask you questions because we want to know you better in order to serve you properly. We believe you should tell us what your needs are and we offer you what we think is best. Especially, we need to know 4 things:

  • How much are you investing?
  • What is your risk tolerance?
  • What is your goal?
  • How long do you plan to invest?

Based on this, Simplewealth can design an investment plan for you and get to sound, rationale based investment decisions.

Does this make sense to you? Do you have experience with other financial advisors? Tell us in the comments!