Emily Allen: Current risk profiles don't capture the effect of Covid-19 on investor risk appetite

Emily Allen: Current risk profiles don't capture the effect of Covid-19 on investor risk appetite

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The use of questionnaires in creating risk profiles is considered best-practice and complies with regulatory framework. But is an investor’s risk profile accurately captured by a questionnaire? Different behavioral biases, experienced by investors in response to an event which lies outside their expectations, are demonstrated using the Covid-19 pandemic and provide an explanation as to why questionnaires alone do not result in a complete risk profile, according to Emily Allen, MSc graduate, Utrecht University.

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