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Communication Task Difficulty in Investment Risk Profiling: A Linguistic Perspective Cover

Communication Task Difficulty in Investment Risk Profiling: A Linguistic Perspective

By: Stephen Moore  
Open Access
|Mar 2024

Figures & Tables

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Financial PlannerQuestion 1 ‘stem’
FP1Question one it’s asking what experience have you had with investing in bonds and managed funds and shares which rise and fall in value over time? Is it:
FP2The first question is what experience have you had with investing in shares, bonds and managed funds which rise and fall in value over time?
FP3Question one. What experience have you had with investing in shares, bonds and managed funds [which rise and fall in value over time] personally?
FP4So question one. What experience have you had with investing in shares, bonds and managed funds which rise and fall in value over time?
FP5So [question one] what experience do you have of investing in shares, bonds and managed funds [which rise and fall in value over time]?

Overview of Five Client Profiles

Financial PlannerClientGenderAgeIncome p.a. $Super balance $Duration of consultation (mins/secs)Duration of risk profiling portion (mins/secs)
1AF5624,000117,00018.107.35
2BF4231,00027,00032.555.50
3CF20N/A5,00043.1016.00
4DF31N/A27,00033.459.45
5EM5935,00037,00016.304.30

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FP1FP2FP3FP4FP5
ANever investedYou’ve never investedNever investedYou’ve never invested[None*] Never invested. Okay.
BHeld investments once or twiceYou’ve held investments once or twiceHeld investments once or twiceYou’ve held investments once or twice-
C[]A regular investor or saver; orI’m a regular investor and saver; andI’m a regular investor and a saverYou’re a regular investor and saver; or-
DYou are actively involved in the market[]I’m actively involved in the marketsI’m actively involved in the marketsYou’re actively involved in the markets-

Investment risk profile questionnaire

Question 1: What experience have you had with investing in shares, bonds and managed funds which rise and fall in value over time?
ANever invested
BHeld investments once or twice
CI’m a regular investor and saver
DI’m actively involved in the markets
Question 2: How would you rate your knowledge of investing?
AExcellent
BFairly good
CBasic, I know a little bit
DI don’t know anything about investing
Question 3: Inflation can erode the buying power of your investments over time. How important to you is it to ensure your investments are protected from inflation?
ANot at all
BSomewhat important
CVery important
DCritical
Question 4: Investing requires choices about the level of return relative to risks. Which of the following investment options would you feel most comfortable with?
AAn average return of 6% per annum and little or no chance of a negative year
BAverage returns of 7 to 8% per annum and a chance of one negative year in a 10-year period
CAverage returns of 9 to10% per annum and a chance of two negative years in a 10-year period
DAverage returns greater than 10% per annum and a chance of three or more negative years in 10
Question 5: How would you feel and react if your investments fell in value by 15% this year?
ADistressed. You’d seek to sell the investment and get your remaining money back
BConcerned. You’d look at what other options you may now have
CRelaxed, as you’re prepared to wait for markets and investments to rebound
DExcited, as this may present new buying opportunities
Question 6: A risk-free rate of 4% might be appealing but it wouldn’t be much good if your goals required a 10% return. Which of the following statements best represents your views?
AAchieving my financial goal is paramount. I would put at risk all I have to achieve my goals
BI would feel happier keeping what I have rather than achieving my goals
CI would risk a small amount of what I have to achieve my goals
DI would risk a large amount of what I have to achieve my goals
Question 7: If you are investing for retirement, please select the following answer which best describes your situation.
AI have more than 20 years to retirement
BI have five to 20 years until I retire
CI’m within five years from retirement
DI have already retired
Question 8: Which of the following timeframes best suits your financial objectives or retirement horizon?
ALess than one year
BOne to three years
CThree to seven years
DGreater than seven years

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Question 1:None.
Question 2:Never considered.
Question 3:Oh, I’d say ‘critical’
Question 4:The last one.
Question 5:Uhm, B.
Question 6:Uhm, I’d go on a sort of 50/50 there.
DOI: https://doi.org/10.2478/fprj-2018-0002 | Journal eISSN: 2206-1355 | Journal ISSN: 2206-1347
Language: English
Page range: 33 - 52
Submitted on: May 31, 2017
Accepted on: Nov 1, 2017
Published on: Mar 19, 2024
Published by: Financial Advice Association of Australia
In partnership with: Paradigm Publishing Services
Publication frequency: 2 issues per year

© 2024 Stephen Moore, published by Financial Advice Association of Australia
This work is licensed under the Creative Commons Attribution 4.0 License.