What is a Risk Profile Management?
A risk profile is an evaluation of an individual’s willingness and ability to take risks. A risk profile is important for determining a proper investment asset allocation for a portfolio. Organizations use a risk profile as a way to mitigate potential risks and threats.
Key Point’s To Remember
- A risk profile is an evaluation of an individual’s willingness and ability to take risks.
- A risk profile is important for determining a proper investment asset allocation for a portfolio.
- Organizations use a risk profile as a way to mitigate potential risks and threats.
The RPM score of the client may range from 23 to 62, based on the answers selected by the client in the risk profiling questionnaire.
High Risk: High risk clients are aggressive traders who are willing to take high risk with their investments. (Score >55)
Moderate Risk: Moderate risk clients prefer to take calculated risk which does not exceed above their capability. (Score 46-55)
Medium Risk: Medium risk clients are less aggressive in their trades but they understand the level of risk involved in trades and invest according to it. (Score 36-45)
Low Risk: Low risk category is for traders/ investors who invest in basically in equity cash and similar products which involve less risk in the market. (Score 23-35)
Risk Based Classification of the Services
| No. | Product | Range | Risk |
|---|---|---|---|
| 1 | All Alpha & Zeta Products Only | 28-36 | Low |
| 2 | All Beta & Theta Products & Any of Above Products | 37-44 | Medium |
| 3 | All Gama, Sigma and Omega Products & Any of Above Products | 45-55 | Moderate |
| 4 | All Delta & Any of Above Products | > 56 | High |
