Do You Want Fewer Nervous Clients?


Sep 15 • Technology • 6865 Views • 1 Comment

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Editor’s Note: Part of what makes The DigitalFA unique is that we hover at the intersection of digital business with marketing for the financial advisor in mind. Often that means how we prospect, communicate and engage – be it email, social media or other online property. However, Marty Morua reminds us that we can also garner marketing concepts from the now-digital tools we use to manage our clients’ financial lives. Here Mr. Morua outlines a roster of web-based solutions for assessing risk in client investments. We would suggest this discipline in your business, and its delivery, is a marketing talking point. This topic and the content you  produce from it can be something to weave into how you describe what you and your business do for your clients.


UPDATE February 3, 2015

A note from the author: My original “Risk Profiling” Blog listed those firms which I felt had the best transparency, simplicity (for a caveperson like me) for both advisor and client to understand, and on-boarding tools. There were other firms which I studied but did not include because of the parameters I chose.  Pocket Risk is one that flew past my radar and should have been included in my post. See the addition of Pocket Risk below.


It is likely that there are more articles written about the fear of a sharp decline, as there are mutual funds available for investors today. The headlines leap off the historical and digital pages:

  • Scary 1929 Market Chart Gains Traction!
  • Wall Street Warning of a Market Crash!
  • Stocks Unquestionably Hesitant!!

Your clients are seeing these too. It is delivered courtesy of international, national and local media outlets, all itching for the opportunity to post eye-grabbing headlines full of turmoil. They lead with the end of the economic world, Mayan Calendar style!

So here we are in September, and besides October, it’s one of the most feared months of the year as far as potential market drops. Foolproof does not exist, but proper diversification helps. So do protective sell stop orders, rebalancing tools, and talking to your clients.

What about stress tests? How risky is your client’s portfolio?  Are financial advisors using tools to properly assess risk to avoid risky future outcomes?  Investigating a dozen of the bigger firms who offer these stress test services, I found some geared towards the hedge fund community, and others used by major endowments and mutual funds. I’ve listed a few who I felt were focused on the independent RIA universe.


A Sacramento California based firm with an easy to understand speed-limit concept of a client’s investment risk score. The higher the # the higher the risk + return. It’s a proprietary index developed by Riskalyze.  There is simplicity in advisors using the product and their clients understanding it as well. Advisors will have a one hour overview webinar covering its features and fundamentals of the product.  The technology is built on academic framework that won the 2002 economics Nobel Peace Prize.

Clients fill out a risk questionnaire (this can be emailed, done over phone, or in person).  The client’s current portfolio can be uploaded from their custodian onto the Riskalyze dashboard to do a stress test to see how it lines up with Riskalyze ‘risk score’. There is a risk/reward heat map (a visual representation to help advisors client’s understand their allocations).

There are CRM integrations with firms such as Redtail and Salesforce, and advisors can embed Riskalyze’s risk questionnaire on their website to help with client lead generation.


This firm, launched in 1998, is an Australian based firm with clients in 20+ countries (their product is offered in 7 languages) and offer RIA’s a free 30 day trial of their product. They have a 3 step process: creating the risk profile, explaining all the pieces and showing how FinaMetrica’s features can be used to the RIA’s advantage. A two page risk tolerance report is created after a set of 25 questions are answered by the financial advisor’s client (this is found on the bottom of the Risk Profiling tab of the website).

It shows how the client is risk tolerant individually compared to others in their group. Clients get put into one of 7 risk groups that are based on a scoring algorithm (0 to 100).  There is a chart showing the differences of each group and allows the RIA to explain to the client how this report is used.

It can raise up to 18 talking points with the clients.

The FinaMetrica risk profiling system is based on a psychometric test of personal financial risk tolerance. Their risk tolerance test was developed with the assistance of the School of Psychology in South Wales Australia.

They have a robust listing of alliance partner firms in the US, Australia, India, Canada, Germany, South Africa, and the UK.  Advisors can enjoy discounted subscription rates to Finametrica based upon relationships they have with some of these partners. In the US they have 16 alliance partner firms such as Schwab Advisor Services, SEI, TDA and Money Guide Pro.

Check out FinaMetrica’s YouTube channel (17 videos)

Hidden Levers

This is a NYC based firm started by Praveen Ghanta, an M.I.T.-trained computer-science graduate, and Raj Udeshi, a veteran of Bank of America Securities.

Their product analyzes relationships between different industries (stocks, ETF’s, Mutual Funds) and levers (130 economic factors).

How it Works:

Their portfolio Stress tests help advisors answer the what-ifs of a client’s holdings. They have relationships with 20 integrated partners (TDA, Fidelity, Money Guide Pro and Redtail to name a few).

They have a custom charting portal available to do research for those financial advisors doing stock picking.  Advisors can create charts and custom brand them (the advisor’s logo) and then can share via various social media platforms, print or email to their clients. Advisors can also apply macroeconomic current events that might affect a particular position (Stock, ETF). Advisors can also create their own scenarios.

From an advisor’s client profile page, they can run a stress test by clicking the run scenario button where they are able to move ‘economic levers’ on their screen. The advisor can create their own economic scenario to see its impact on their client’s portfolio. There are 60 existing built-in scenarios to choose from.

These levers are a big selling point where rather than spitting out data advisors can maneuver these various levers to get instant scenarios on their client’s portfolios.  Advisors can basically plug in economic trends/indicators into their analysis and stress-test existing portfolios against all scenarios, while getting suggestions to protect against macro-economic vulnerabilities.

They have weekly training webinars (introductory & advanced) as well as what’s new webinar for any new functionalities they add to their site. They also have a once a month ‘War Room’ webinar breaking down a major market moving event that might be affecting many RIA’s. They offer CE credits available for CFP’s. They also offer a free mini portfolio stress test toolkit from the landing page of their website.


A NYC based firm founded in July 2010 that uses a crash test scenario, similar to a car test crash, to analyze a client’s optimum risk suitability. They use a 3 step portfolio crash test report that advisors can review with their clients.

RiXtrema’s “Portfolio Crash Testing for Advisors” is available for a free 7-day trial by going to to try it.

They also offer a “Portfolio Crash Testing Pro” where the financial advisor can create customize scenarios for HNW family accounts. Here advisors can use RiXtrema’s Risk Aware Rebalancing feature. They have a free test offer on their home page that offers free crash testing (stress testing). Here you can create a portfolio by entering the ticker and either dollar or % amount, save it and click a button to show the potential crash test results.

They offer their Riskostat product which is RiXtrema’s first product that specifically targets financial advisors.

As mentioned, I only listed a few firms. There are others who offer products that will help financial advisors “crash test” their clients’ portfolios. The point is that over the years of speaking to hundreds of financial advisors, I consistently find this area to be one of their biggest fears and what keeps them up at night.  My post is simply to encourage advisors to consider this as part of their arsenal of doing business.

Pocket Risk is a risk profiling company based in the UK and the US. Their tagline is straight to the point – “Discover Your Clients’ Risk Tolerance and Determine an Appropriate Portfolio.”
Pocket Risk offers a 20 point psychologically based risk questionnaire, which is based on academic research from the University of Georgia, The American College and Virginia Tech – all leading schools in the field of financial planning.
The questionnaire is unique in that it offers past historical examples of investment performance in which clients have to react, such as the 2008/2009 financial crisis. Once the client completes the questionnaire a 3-page report is produced with an analysis of the results.
To help advisors better control the client experience the product comes with a number of special customizations and features. For example advisors can add their own questions to Pocket Risk, embed it on their website or white label the service.
Marty Morua

Marty Morua

I was fortunate to spend my entire 12 year career with TD Ameritrade working in the Institutional Advisor Services area. After the finalized merger in 2007 they moved the Institutional operations to Fort Worth, Texas. After receiving my severance I decided to help mange family wealth accounts here in New York City.

The tentacles of my background in financial services stretch deeply in the custody side of the business. I developed many specialties but what I enjoyed the most was the RIA relationship building aspect of my 12 year career with TDA. Some highlights are actively participating in RIA office visits rescuing troubled relationships, helping our sales team exceed their YOY targets for net new assets, reinforcing practice management and best practices to help RIA’s grow their business, and deeply engaging myself in the regional/annual conferences where I enjoyed interacting with RIA’s on our platform while courting the prospective RIA’s.

Preserving, growing and rescuing fragile relationships are my core specialties and this allowed me to develop a strong customer following.

The above article is for educational purposes only. Investment professionals should consult their compliance departments before accessing or implementing any of the marketing ideas, practices or advice found in the DigitalFA. Your use of the DigitalFA website tells us you have read and agreed to our Terms of Service.

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One Response to Do You Want Fewer Nervous Clients?

  1. […] Marty came back to us with an update to his piece run late last year – and we felt it important to resurface that here as well as updating the original article. You can read the full profiles here. […]

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