{"id":382161,"date":"2024-06-28T14:27:57","date_gmt":"2024-06-28T08:57:57","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=382161"},"modified":"2024-06-28T14:27:58","modified_gmt":"2024-06-28T08:57:58","slug":"risk-profiling-a-key-part-of-personal-finance-that-few-understand","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand","title":{"rendered":"Risk profiling | A key part of personal finance that few understand"},"content":{"rendered":"\n<p>Personal finance content tends to focus on \u2018investment risks\u2019. <em>Inflation risk<\/em>: that your money will not keep its purchasing power. <em>Interest rate risk<\/em>: that your loan repayments can increase while the value of your portfolio decreases at the same time. <em>Market risk<\/em>: that your portfolio\u2019s current valuation can free-fall because some random oil squabble affects the market mood.&nbsp;<\/p>\n\n\n\n<p>These are all external factors that you need to know, analyse and work around. Inflation, interest rates and markets will always fluctuate; a good financial plan takes these into account. But once market risks are handled, it\u2019s <em>how you react to them<\/em> that matters.&nbsp;<\/p>\n\n\n\n<p>The biggest risk to a good financial plan is <strong><em>you<\/em><\/strong>.&nbsp;<\/p>\n\n\n\n<p>Kind of like life. Even if you\u2019re talented and hard-working, things will suck more than once in your lifetime. It\u2019s how you react to these times that matters.<\/p>\n\n\n\n<p>Obviously, the financial services industry knows this. So it tries to make a \u2018risk profile\u2019 on you. This is important enough that regulators mandate it for pretty much every investment transaction \u2014 whether you go to a full-fledged professional investment adviser, a limited-scope mutual fund distributor, a fintech platform or even directly approach a financial product provider.&nbsp;<\/p>\n\n\n\n<p>The problem, however, is that different organisations might measure slightly different things, or just measure the same thing badly. Your experience could be very different from place-to-place, and from time-to-time. More importantly, your risk profile may not do what it\u2019s supposed to.<\/p>\n\n\n\n<p>So, what <em>is<\/em> risk profiling supposed to do?<\/p>\n\n\n\n<p>As I\u2019ve also done in my <em>Money Mindful basics<\/em> series, let\u2019s dissect this crucial aspect of personal finance and the financial planning process.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe width=\"100%\" src=\"https:\/\/www.youtube.com\/embed\/g7OzoeiXbLQ\" frameborder=\"0\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-s-a-risk-profile\"><strong>What&#8217;s a risk profile?<\/strong><\/h2>\n\n\n\n<p>After decades of arguing about terminology, the industry now broadly agrees that the term \u2018risk profile\u2019 encompasses three distinct aspects:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The <\/em><strong><em>need <\/em><\/strong><em>to take risk<\/em>, which is calculated based on the gap between where you are (in terms of finances) and where you want to go (i.e. your goals). This calculation of a \u2018required rate of return\u2019 is sometimes separated out completely from your risk profile, as it\u2019s part of the goal-setting or financial planning process anyway.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The <\/em><strong><em>ability or capacity<\/em><\/strong><em> to take risk<\/em>, which is based on factors such as time horizon and liquidity, which are also fairly objective.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The <\/em><strong><em>willingness<\/em><\/strong><em> to take risk<\/em>, (also called \u2018risk tolerance\u2019 or \u2018appetite\u2019) which is a psychological aspect that tries to measure how willing you are to take risks or how much uncertainty you can tolerate in pursuit of your goal. These are personality traits, and are hence apparently quite stable over time.<\/li>\n<\/ul>\n\n\n\n<p>You can go deeper into each of these:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"940\" height=\"458\" src=\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-36.png\" alt=\"\" class=\"wp-image-382166\" srcset=\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-36.png 940w, https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-36-300x146.png 300w, https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-36-768x374.png 768w\" sizes=\"auto, (max-width: 940px) 100vw, 940px\" \/><figcaption class=\"wp-element-caption\"><em>Source: CFA Institute, <\/em><a href=\"https:\/\/rpc.cfainstitute.org\/en\/research\/reports\/investment-risk-profiling\"><em>Investment Risk Profiling: A guide for financial advisors<\/em><\/a><\/figcaption><\/figure>\n<\/div>\n\n\n<p>On top of this, we&#8217;re all human. We have shorter-term \u2018behavioural biases,\u2019 such as emotional ups and downs, as well as \u2018cognitive biases\u2019.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1248\" height=\"414\" src=\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-35.png\" alt=\"\" class=\"wp-image-382165\" srcset=\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-35.png 1248w, https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-35-300x100.png 300w, https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-35-1024x340.png 1024w, https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/image-35-768x255.png 768w\" sizes=\"auto, (max-width: 1248px) 100vw, 1248px\" \/><\/figure>\n\n\n\n<p>Ideally, a financial adviser must know all three aspects of one\u2019s risk profile before recommending a course of action.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-risk-profiling-is-done\"><strong>How risk profiling is done<\/strong><\/h2>\n\n\n\n<p>In health or medicine, one can do pathology tests and take X-rays to see inside you. Unfortunately, we can\u2019t yet look inside you to find the risks you should be comfortable with. So, the finance industry simply asks you questions. <\/p>\n\n\n\n<p>While these \u2018risk profiling\u2019 questionnaires of different organisations look similar from afar, they are not. They differ widely based on what and how they measure.\u00a0At one extreme, old-fashioned practitioners believe that risk profiling, as a whole, is hard to do objectively; it\u2019s best done through a subjective, maybe structured, discussion between an investor and their adviser.<\/p>\n\n\n\n<p>At the other end are those who try to measure your risk tolerance objectively using a \u2018psychometric\u2019 test, since it\u2019s supposedly a personality trait. A psychometric study combines psychology and measurement. Such practitioners may or may not use another questionnaire to assess your risk capacity.<\/p>\n\n\n\n<p>And then there\u2019s the rest of the world, which uses questionnaires with just 5-6 questions. These claim to be based on finding \u2018revealed preferences,\u2019 but mostly have no underlying philosophy of what they are trying to measure. They try to categorise you on a 5-point scale from \u2018ultra-conservative\u2019 to \u2018ultra-aggressive\u2019, and then try to match you to their own product offerings. There are practical issues with these tests:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ideally, a risk profile should include questions about at least two separate aspects (capacity and tolerance). In practice, I have seen questionnaires that mix up questions on both of these, alongside the need to take risk.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They aren\u2019t based on any evidence on how we can know how one will behave in the future.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They are worded ambiguously (i.e. <em>badly<\/em>).<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They simply average the scores from very different questions rather than resolving inconsistencies (for instance, someone having low capacity and high tolerance, or <em>vice versa, <\/em>may simply be assigned a &#8216;moderate&#8217; risk profile).<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They don\u2019t follow a standardised scale when presenting results.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The result is that an investor can get very different \u2018classification labels\u2019 of \u2018conservative\u2019, \u2018balanced\u2019 or \u2018growth\u2019 from different tests. As a result, they get different recommendations for asset allocation from different firms. We don\u2019t really know where the differences came from. While in developed markets like Australia, the labels carry risk\/return expectations so investors can get somewhat comfortable with (or ask more questions about) what they are getting into, this is not the case in India.<\/p>\n\n\n\n<p>Goal-based financial planning processes should ideally assign different risk profiles to different goal buckets. In practice, however, investors are given a single risk profile, with no explanation of how it aligns with different time and liquidity constraints.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-philosophical-dilemma\"><strong>A philosophical dilemma<\/strong><\/h2>\n\n\n\n<p>I have been sceptical about risk profiling questionnaires my whole career. I struggle to understand their underlying philosophy, and I\u2019ve always refused to be responsible for them. I\u2019ve never trusted them to actually deliver on their promise of predicting behaviour \u2014 especially panic.\u00a0<\/p>\n\n\n\n<p>Recently, when I spoke with <a href=\"https:\/\/haas.berkeley.edu\/faculty\/odean-terrance\/\">Professor Terrance Odean of UC Berkeley<\/a>, I asked him for his views on risk profiling. He quipped: \u201c<em>How do you know they have a lower risk profile? Because they take less risk.<\/em>\u201d<\/p>\n\n\n\n<p>Here\u2019s what he had to say on the topic:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe width=\"100%\" src=\"https:\/\/www.youtube.com\/embed\/xxgMnjK__3Y\" frameborder=\"0\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Professor Odean teaches personal finance. And he\u2019s of the view that objective calculations of one\u2019s need and capacity for risk, combined with some subjective assessment of their financial comfort (which comes from knowledge and experience) should be enough for an asset allocation recommendation.&nbsp;<\/p>\n\n\n\n<p>Yes, investors may panic. But that\u2019s what the financial industry generally, and the financial advice industry specifically, is there for: to educate, to guide, to coach. Shouldn\u2019t we put more effort into educating investors to invest better, and training advisers to coach better?<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p>Risk profiling includes at least two distinct aspects &#8211; risk capacity and risk tolerance (ignoring the need for risk, which should be considered separately anyway). Capacity is a function of your financial situation while tolerance is supposedly a psychological personality trait. Beyond this, our investing decisions are hit by other shorter term challenges \u2014 both emotional and cognitive \u2014 that we all suffer from. These aren\u2019t addressed in profiling exercises, though they should.<\/p>\n\n\n\n<p>Whenever you interact with the financial industry, pay attention to the risk profile questionnaire. Ask them the philosophy behind their questions \u2014 what they are trying to measure, whether they\u2019re using a well-regarded external tool or if they\u2019ve developed this questionnaire internally, what research supports it, how they use the results, how they map the result with their asset allocation recommendations etc..<\/p>\n\n\n\n<p>After all, the whole point of the risk-profiling exercise is to reduce anxiety for you. If it\u2019s not doing that, let\u2019s keep asking questions.&nbsp;<\/p>\n\n\n\n<p>In the meantime, you should discuss with your adviser how much of a coach you want him or her to be. The onus should be on their skill \u2014 not a questionnaire.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a &#8216;risk profile&#8217;.  But do they really work?<\/p>\n","protected":false},"author":242542,"featured_media":382163,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[532],"tags":[509,876,768],"class_list":["post-382161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-subtext","tag-personal-finance","tag-risk-profile","tag-terrance-odean"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.5 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Risk profiling | A key part of personal finance that few understand &#8211; Z-Connect by Zerodha<\/title>\n<meta name=\"description\" content=\"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a &#039;risk profile&#039;. But do they really work?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Risk profiling | A key part of personal finance that few understand\" \/>\n<meta property=\"og:description\" content=\"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a &#039;risk profile&#039;. But do they really work?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand\" \/>\n<meta property=\"og:site_name\" content=\"Z-Connect by Zerodha\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/zerodha.social\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-28T08:57:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-28T08:57:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png\" \/>\n\t<meta property=\"og:image:width\" content=\"700\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Pranav\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@zerodhaonline\" \/>\n<meta name=\"twitter:site\" content=\"@zerodhaonline\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Hansi Mehrotra\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand\",\"url\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand\",\"name\":\"Risk profiling | A key part of personal finance that few understand &#8211; Z-Connect by Zerodha\",\"isPartOf\":{\"@id\":\"https:\/\/zerodha.com\/z-connect\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage\"},\"image\":{\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage\"},\"thumbnailUrl\":\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png\",\"datePublished\":\"2024-06-28T08:57:57+00:00\",\"dateModified\":\"2024-06-28T08:57:58+00:00\",\"author\":{\"@id\":\"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/01e659a83a429879f3e0f8f86a76c0fe\"},\"description\":\"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a 'risk profile'. But do they really work?\",\"breadcrumb\":{\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage\",\"url\":\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png\",\"contentUrl\":\"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png\",\"width\":700,\"height\":400},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/zerodha.com\/z-connect\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Subtext\",\"item\":\"https:\/\/zerodha.com\/z-connect\/category\/subtext\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Risk profiling | A key part of personal finance that few understand\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/#website\",\"url\":\"https:\/\/zerodha.com\/z-connect\/\",\"name\":\"Zerodha product and business updates\",\"description\":\"Z-Connect is Zerodha&#039;s official blog. Get the latest updates, product announcements news, and insights all in one place.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/zerodha.com\/z-connect\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/01e659a83a429879f3e0f8f86a76c0fe\",\"name\":\"Pranav\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/9c05220ce90808922d44304320212189dc94a35eb86424d36fadd7bab9377e61?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/9c05220ce90808922d44304320212189dc94a35eb86424d36fadd7bab9377e61?s=96&d=mm&r=g\",\"caption\":\"Pranav\"},\"description\":\"Senior writer at Zerodha\",\"url\":\"\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Risk profiling | A key part of personal finance that few understand &#8211; Z-Connect by Zerodha","description":"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a 'risk profile'. But do they really work?","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand","og_locale":"en_US","og_type":"article","og_title":"Risk profiling | A key part of personal finance that few understand","og_description":"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a 'risk profile'. But do they really work?","og_url":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand","og_site_name":"Z-Connect by Zerodha","article_publisher":"https:\/\/www.facebook.com\/zerodha.social","article_published_time":"2024-06-28T08:57:57+00:00","article_modified_time":"2024-06-28T08:57:58+00:00","og_image":[{"width":700,"height":400,"url":"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png","type":"image\/png"}],"author":"Pranav","twitter_card":"summary_large_image","twitter_creator":"@zerodhaonline","twitter_site":"@zerodhaonline","twitter_misc":{"Written by":"Hansi Mehrotra","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand","url":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand","name":"Risk profiling | A key part of personal finance that few understand &#8211; Z-Connect by Zerodha","isPartOf":{"@id":"https:\/\/zerodha.com\/z-connect\/#website"},"primaryImageOfPage":{"@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage"},"image":{"@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage"},"thumbnailUrl":"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png","datePublished":"2024-06-28T08:57:57+00:00","dateModified":"2024-06-28T08:57:58+00:00","author":{"@id":"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/01e659a83a429879f3e0f8f86a76c0fe"},"description":"The biggest risk to any financial plan is you.\u00a0This is why the finance industry makes you a 'risk profile'. But do they really work?","breadcrumb":{"@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#primaryimage","url":"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png","contentUrl":"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png","width":700,"height":400},{"@type":"BreadcrumbList","@id":"https:\/\/zerodha.com\/z-connect\/subtext\/risk-profiling-a-key-part-of-personal-finance-that-few-understand#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/zerodha.com\/z-connect\/"},{"@type":"ListItem","position":2,"name":"Subtext","item":"https:\/\/zerodha.com\/z-connect\/category\/subtext"},{"@type":"ListItem","position":3,"name":"Risk profiling | A key part of personal finance that few understand"}]},{"@type":"WebSite","@id":"https:\/\/zerodha.com\/z-connect\/#website","url":"https:\/\/zerodha.com\/z-connect\/","name":"Zerodha product and business updates","description":"Z-Connect is Zerodha&#039;s official blog. Get the latest updates, product announcements news, and insights all in one place.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/zerodha.com\/z-connect\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/01e659a83a429879f3e0f8f86a76c0fe","name":"Pranav","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/zerodha.com\/z-connect\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/9c05220ce90808922d44304320212189dc94a35eb86424d36fadd7bab9377e61?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/9c05220ce90808922d44304320212189dc94a35eb86424d36fadd7bab9377e61?s=96&d=mm&r=g","caption":"Pranav"},"description":"Senior writer at Zerodha","url":""}]}},"jetpack_featured_media_url":"https:\/\/zerodha.com\/z-connect\/wp-content\/uploads\/2024\/06\/Risk-profile-subtext.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/posts\/382161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/users\/242542"}],"replies":[{"embeddable":true,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/comments?post=382161"}],"version-history":[{"count":3,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/posts\/382161\/revisions"}],"predecessor-version":[{"id":382167,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/posts\/382161\/revisions\/382167"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/media\/382163"}],"wp:attachment":[{"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/media?parent=382161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/categories?post=382161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zerodha.com\/z-connect\/wp-json\/wp\/v2\/tags?post=382161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}