TY - JOUR T1 - Do as I Say, Not as I Do: <em>An Analysis of Portfolio Development Recommendations Made by Financial Advisors</em> JF - The Journal of Wealth Management DO - 10.3905/jwm.2019.1.089 SP - jwm.2019.1.089 AU - John Grable AU - Amy Hubble AU - Michelle Kruger Y1 - 2019/11/12 UR - https://pm-research.com/content/early/2019/11/12/jwm.2019.1.089.abstract N2 - A survey of over 200 financial professionals was used to determine how financial advisors assess, rank, and use client characteristics and risk-profiling inputs when developing asset allocation recommendations. Findings from this study suggest that in a scenario-free context, financial advisors rank a client’s time horizon as the most important risk-profiling input. However, when viewed in the context of a specific client scenario, financial advisors appear to alter the importance of certain risk-profiling inputs, becoming overly reliant upon a client’s age and employment status. Results from this study also show that financial advisors are somewhat inconsistent in their use of risk-profiling inputs across client scenarios. Results do show that older financial advisors with more experience are more apt to consistently recommend portfolios with higher equity ratios than their younger counterparts.TOPICS: Portfolio construction, risk management, wealth managementKey Findings• In a client neutral context, financial advisors rank time horizon, liquidity need, risk capacity, risk need, and risk tolerance as important risk-profiling inputs.• However, when faced with client asset allocation choices, financial advisors appear to use other risk-profiling inputs to shape portfolio recommendations.• Although not a recommended practice, financial advisor seem to be overly reliant on the use of client age and employment status when developing asset allocation recommendations. ER -