The attitude to risk is a factor advisers use to advise the client into the right type of portfolio/investments. While this in only one factor of the decision making process there are various factors are likely to affect a client’s attitude to risk during the accumulation phase:

• Timescale

– A long time frame (20 years +) to retirement will allow most clients to accept short term volatility in order to achieve higher long term growth

– Client’s approaching retirement will have more importance on reducing risk and volatility.

• Wealth

– If the pension if only a small proportion of the client’s invested wealth they would be more likely to accept higher risk

– However if the pension is a large portion of their overall retirement planning then they are likely to be more cautious

• Past experience

– Someone with a history of investments is more likely to understand the basics and also risks.

– Someone with little to no knowledge may find investments uncomfortable

• Other investments

– Clients may have different risk attitudes on different investments.