Gathering Data

An advisor can use questionnaire results to plot an investor’s risk/style score. As mentioned earlier, a predictive link must exist from the questionnaire responses to the resulting personality typing that is derived, and to the subsequent investment behaviour that occurs. If the correlation is high between the personality dimensions outlined in the questionnaire and the individual’s ultimate portfolio selections, then the exercise has predictive value. If the results are uncorrelated, then the questionnaire must be revised. In the example above, a stratified sample of clients would complete the questionnaire, and the raw scores would be used to identify subgroups.

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