MetLife has launched a ‘capacity for loss’ toolkit to help advisers gauge clients’ appetite for investment risk.
The provider says the toolkit was developed in response to guidance from the FSA which specifically highlights the need for advisers to evaluate a client’s ability to absorb falls in the value of their investments.
MetLife product marketing director Peter Carter (pictured) says: “There is a distinct lack of support material for advisers around the capacity for loss issue and this toolkit aims to start bridging this gap.
“Over a client’s lifetime, attitudes to risk change and their capacity for loss decreases. IFAs need to have the tools to offer specific guidance.”
The kit was produced in conjunction with Better Retirement Group and includes views from Better Retirement Group director Billy Burrows, a guide to capacity for loss and a range of client facing sales aids.
Burrows says: “Most advisers will understand their clients’ circumstances but few actually challenge them about their capacity for loss.
“The key to understanding financial objectives is to determine future income requirements, how much flexibility is needed and their risk profile.”
Hudson Green & Associates principal Ian Hudson says: “There is a real need for advisers to take on the FSA’s mantra of ensuring we properly understand a client’s attitude to risk.
“If this tool aids that process and does not point people towards MetLife’s own products then it should be useful.”