Risk Signature | Investor DNA

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Introducing the Risk Signature™ -
Investment risk, reimagined...

Traditional risk profiling fails to distinguish between Risk Appetite and Risk Tolerance, often treating them as interchangeable. This is a critical flaw, and the distinction holds profound implications for investment success.

Investor DNA®’s unique Risk Signature™ decodes how investors think, feel, and behave in relation to investment risk across five distinct dimensions:

 Risk Appetite
 Sensitivity to Loss
 Risk Tolerance
 Risk Capacity, and
 Required Risk

The result is a true 360° view of your client's approach to investment risk.

Risk Appetite reflects how a client thinks about risk. Sensitivity to Loss (the intervening variable) captures how they feel when markets fall — their level of anxiety. And Risk Tolerance reveals how they behave when markets fall — their behavioural threshold or 'tipping point' at which they feel compelled to act to relieve that anxiety.

Manage your clients' emotions during market turmoil - in real time...

Investor DNA® measures each risk dimension independently using emotional, behavioural, and scenario-based questions — aligning with ASIC’s preferred approach. This enables advisers to identify which clients are most vulnerable in volatile markets and act proactively, starting with those at greatest risk.

Clients with high Sensitivity to Loss and low Risk Tolerance are the most exposed — prone to emotional fear-driven decisions that cause costly mistakes, derailing their long-term strategy and destroying portfolio value.

Investor DNA® empowers advisers to construct truly risk-aligned portfolios while actively protecting clients from emotionally driven mistakes. The result is a disciplined, evidence-based approach that strengthens client outcomes and supports the adviser’s obligations under the Corporations act 2001, ASIC regulations and the FASEA Code of Ethics.

Investor DNA® protects both adviser and client, ensuring that your advice meets and exceeds your obligations under law, including Best Interest Duty.

Learn how Investor DNA® helps you meet your legal and regulatory obligations