Consumers ‘disconnected’ from attitude to risk: Axa

Around two thirds of people disagree with the attitude to risk given to them by risk profilling tools, Axa Wealth has claimed.

A study of over 2,000 people found a "disconnect" between what people thought their appetite to risk was and what it was assessed as by risk profiling tools, Axa said.

According to the study, 25% of respondents believed they were in the lowest risk category. After profiling, only 6% of this group were found to be so extremely risk averse.

A third of consumers had a stronger appetite for risk than they had thought, with 31% more cautious than they had pictured themselves to be, the Axa Wealth Self research suggested.

Mike Kellard, chief executive officer of AXA Wealth, said: "Appreciation of risk is paramount in any client-adviser relationship.

"This difference between perceived and actual self is critical to understand; if individuals get this wrong, there is likely to be a knock on effect and impact on investment behaviour, and in turn, likelihood of meeting financial goals.

The study was produced in partnership with University College London's Professor Adrian Furnham.

Respondents were asked to rate their risk appetite with a number from one to seven, before completing Axa's 14-step risk profiling process.

In October, research by network Personal Touch suggested risk profiling tools were accurate only 90% of the time.