Launch of Oxford Risk Rating Online: Informing Investor Choice
7th October 2013
Oxford Risk Ltd, a spin-out of the University of Oxford, has developed an online Risk Profiling service that gives both individual investors and financial advisers access to professional risk assessments. An accurate risk assessment is the first step in matching the investor’s preferences to the right investment, and can enhance transparency in the wealth management process. The web-based system, Oxford Risk Rating Online, follows Financial Service Authority guidelines that require advisers take reasonable steps to ensure that investment recommendations are suitable for their customers.
The Oxford Risk Rating is already available to over 40,000 advisers across the globe, providing science based off-the-shelf or customised Risk Profiling solutions. Describing the new service, André Neves Correia, Oxford Risk Director of Business Development said: “The web service provides a comprehensive platform with flexible delivery and a detailed analysis of individual risk tolerance and preference to support the selection of suitable investments. Investors can be invited to complete an assessment online or on paper, at home or in the adviser’s office, prior to a consultation.”
Founded by Lord Krebs, Professor Alex Kacelnik and Dr. Ed Mitchell based on research conducted at the University’s Department of Zoology in 2002; Oxford Risk was created with the support of the University of Oxford‘s technology transfer company, Oxford University Innovation. Over time, the team have adapted their research to provide objective tools to assess risk in different sectors and industries, especially the financial sector.Terry Thomson, CEO of Oxford Risk, explained: “In Guidance published in 2011 the FSA (now FCA) noted that some firms had been using unsubstantiated methods to establish the risk preferences of their clients. This has resulted in widely publicised cases that have not only damaged the firms at fault, but also the investment industry as a whole. The Oxford Risk Rating uses scales derived from the statistical analysis of data gathered from thousands of respondents, selected to match the targeted investor population. The reliability and accuracy of the methodology employed gives advisers a powerful tool to help them meet the 2011 regulatory guidance.”
“Optionally, the Oxford Risk Rating can also reveal key aspects of the investor’s capacity for loss, by considering their time horizons, the required certainty of investment goals, and their attitudes to short-term falls in the value of their investments.”
The new service will support individuals wishing to purchase a one off assessment, to international financial services organisations, servicing multiple markets using different Oxford Risk profilers to target specific investor demographics. Results can be emailed to the investor, or restricted to the adviser, in full and abbreviated forms. Organisations
can pre-purchase per use credits, or annual licenses per user. The service can operate independently or through links integrating with in -house Advice and Customer Relationship Management systems.
