NEW YORK, Feb. 12, 2015 /PRNewswire/ -- Portfolio stress-testing expert RiXtrema and risk-profiling specialist FinaMetrica announced today they have collaborated to offer a combined end-to-end risk management solution to financial advisors. The joint offering will include FinaMetrica's psychometric risk tolerance test and portfolio mappings services, along with RiXtrema's instantaneous stress testing and portfolio applications to quickly modify portfolio exposures and mitigate risk.
Monitoring differences between risk tolerance and portfolio risk scores will enable advisors and registered reps to provide better, more suitable portfolios to clients and have more enriched conversations about expectations. Advisors will be able to scenario-test their clients' portfolios against traumatic events such as the Financial Crisis, compare the results against clients' risk tolerance scores and financial capacity for loss, and immediately make necessary corrections, such as generating appropriate buy/sell instructions.
"A strong advisory practice requires three things: a detailed assessment of the investor's risk tolerance; a thorough understanding of the investor's goals and financial plans; and a robust estimation of portfolio risk and construction of suitable portfolios," said RiXtrema President Daniel Satchkov, CFA. "Equipped with the best tools available, our subscribing advisors can provide maximum protection and value to clients, successfully compete in the advisory marketplace, and effectively stay ahead of changing market scenarios."
The FinaMetrica risk tolerance methodology assesses investors' psychological tolerance for financial risk with specific emphasis on downside volatility. "We have been providing risk profiling services to registered investment advisors in the U.S. for more than 12 years. For the first time, advisors will have the ability to bring together client risk tolerance profiles and portfolio risk analysis to ensure that risk exposure in their investment portfolios can be managed and mitigated," said FinaMetrica co-founder and director Paul Resnik.
Current RiXtrema and FinaMetrica subscribers will soon have access to the integrated functionality. For more information about the services, or to subscribe, contact Bill Faulkner ([email protected]) or Tyler Nunnally ([email protected]).
RiXtrema, founded in 2010, is a portfolio crash-testing company that helps advisors discuss risk with clients. Long used by fund managers, pensions plans and funds of funds, RiXtrema has introduced its risk management tools, including their new RetireRisk planning module, to the financial advisory and broker/dealer community to help ensure that clients get the analysis and advice they need. For more information, visit www.rixtrema.com/advisor.
FinaMetrica is an Australia-based company, with U.S. operations based in Atlanta, Georgia, that specializes in risk tolerance and risk-related matters. In 1998, it launched the FinaMetrica Risk Profiling System to help advisors make better investment decisions and set proper risk-and-return expectations for their clients. The system uses psychometrics, a scientific discipline blending psychology and statistics, to ensure reliability and validity. Since inception, the system has been adopted by 5,500 advisors across 23 countries in seven languages, with more than 750,000 risk tolerance tests completed. For more information, please visit www.riskprofiling.com.