Adviser support specialist and IFP sponsor Parmenion has launched an enhanced risk profiling tool.

The risk profiling questionnaire is designed to provide an accurate measure of clients’ financial risk tolerance.

It provides advisers with a score representing the clients’ risk tolerance and their capacity for loss.

This score is then used to generate a risk-adjusted portfolio from Parmenion’s range of investment solutions.

The questionnaire is compatible with the Financial Services Authority’s rules on ‘Assessing Suitability’ and has been approved by Tenet Group’s compliance team.

The tool was also independently reviewed by business psychology consultants Edgecumbe Consulting.

Richard Mein, managing partner of Parmenion, said the FSA report on assessing suitability indicated risk profiling would remain a key element in the financial advice process.

He said: “Parmenion welcomes the emphasis on advisers needing to collect, and properly account for, all the information relevant to assessing the degree of risk a client is willing to take.

“Our Risk Profiler is an efficient way to calculate a client’s risk appetite and is fully integrated into an adviser’s business through our online process which covers everything from risk profiling all the way through to portfolio construction.”