The recent market falls confirm, once again, the need to frame investors' expectations so that they are not surprised by nor react inappropriately to volatility. We suggest you read Vanguard UK's new approach to suitability with regard to risk, which is largely consistent with our methodology, and we revisit a paper on investor behaviour first published in 2002.

Does the Current Volatility of Your Clients' Portfolios Exceed Your Expectations?

You might not have been surprised had you seen our unique illustrations of the last 40 years' portfolio performance for each of our seven risk groups. FinaMetrica's highly regarded Investment Risk and Return Guide and Charts have been updated to include data to June 30, 2011. Click for your updated version.

Upcoming US, UK, Germany, Singapore, South Africa and India Visits

FinaMetrica cofounders, Geoff Davey and Paul Resnik, will be attending the FPA's annual conference in San Diego September 15 -18. Geoff will then be continuing onto New York for a week before spending a few days in London on his way to visit with our business partner in South Africa. Paul will head to the UK in late September for several weeks. He will be attending IFP, speaking at the Platforum conference and working with ThreeSixty on a round UK Suitability road show. He will visit our business partner in Germany and then return via Singapore. He also plans to visit India in November.

Geoff and Paul are open to suggestions from our subscribers and others for group presentations, discussions with FinaMetrica subscribers, talking with those thinking of making a decision on risk profiling, investment managers looking to use effective descriptions of investment risk and others in the service and product supply chain looking to build turn-key solutions. Contact geoff.davey@finametrica.com or paul.resnik@finametrica.com.

Vanguard's New Approach to Suitability: Similar to FinaMetrica's

Vanguard, UK has developed a process to help advisers match investments to the needs of investors, click here. This was developed as a consequence of the FSA's January 2011 Guidance paper on Suitability. FinaMetrica subscribers who have followed the suitability methodology promoted by us will be encouraged by its consistency with Vanguards recommendation. The process relies on a psychometric test of financial risk tolerance and several of the references are to academic work we have been involved in. Most importantly it recognises that the results of such a tool should only provide a starting point for a conversation about investment risk, the test report is not an end in itself. This is a well written and very coherent paper.

Investors Behaving Foolishly

In this blast from the past, we highlight the still very relevant messages found in the trail-blazing research studies on investor behaviour carried out by Terrence Odean, Professor of Finance at the Haas School of Business at the University of California, Berkeley, click here.

Retirement Research Project Reminder

FinaMetrica is pleased to support A Cross-Cultural Study of Retirement Planning and the Well-Being of Pre-Retirees in Australia and Malaysia. This project is sponsored jointly by the University of New South Wales and the Universiti Putra Malaysia and is being conducted by the UPM's Nor Wahiza Abdul Wahat PhD while a visiting academic at the UNSW’s School of Psychology. The study questionnaire is available here. Any promotion that readers can give the study would be much appreciated.

For some great information and free reports, visit us at www.riskprofiling.com.

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