Investments  

How to manage risk in a client's portfolio

  • Describe some of the challenges relating to risk in a client's portfolio
  • Explain how to diversify a cleint's portfolio
  • Identify how risk impacts a client's portfolio
CPD
Approx.30min

When selecting equity investments, advisers should also consider stylistic diversification by selecting a mixture of equities considered value and growth. While growth has been in the driving seat over the past decade or so, it will not take much for growth to fall out of fashion so it would be wise for positions to be spread across both growth and value. 

In summary, risk is an essential and welcome component of successful investing as it generates returns for your clients. But we also know that it is one of the hardest nuts to crack, which we see very clearly when looking at DIY investors’ portfolios.

Article continues after advert

Determining the appropriate level of risk your client should take is one of the main ways that advisers and investment managers add value, and avoid the seven deadly sins that DIY investors succumb to. 

David Miller is an investment director at Quilter Cheviot

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Risk is completely unrelated to return in investment, true or false?

  2. Which of the following is NOT a systematic risk?

  3. Which of the following is NOT an investment 'sin'?

  4. Doing nothing at all can be the best option, true or false?

  5. Someone wanting to go for capital growth should have no more than 40 per cent allocated to equities, true or false?

  6. Which of the following is another form of diversification?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe some of the challenges relating to risk in a client's portfolio
  • Explain how to diversify a cleint's portfolio
  • Identify how risk impacts a client's portfolio

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Any comments about this article or FTAdviser's CPD in general?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Investments CPDSee my completed CPDSee all CPD