Asset Allocation at annual review

When you undertake an annual review, what's the best way to determine the client's portfolio's asset allocation if their risk profile hasn't changed?

a) No change. Whatever the asset allocation was when they last completed the questionnaire is the AA you use now.
b) Update. Since the risk profiling tool you use is likely to have a different asset allocation for the same risk profile, update the portfolio to the new allocation.


  • I'd suggest b on the basis that if using the AA from a risk profiling tool, that's what you should be doing if you've bought into that whole system/process. If you're mapping the risk profile output to an AA you construct yourself or buy in, like you say, chances are this will have changed with some sort of tactical tweaks.

    Jonny (paraflex)
  • Thanks, yeah I think you're right. There's no point in using something which is now at least a year old. (i assume all the 'off-the-shelf' risk profilers update their AA periodically).

  • @arongunningham said:
    (i assume all the 'off-the-shelf' risk profilers update their AA periodically).

    We've just done a recent review of different risk profile tools and for the ones who feed directly into an AA, they update at least annually, and some quarterly.

    Jonny (paraflex)
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