Oxford Risk, a spinout company of the University of Oxford, has launched a decumulation specific Risk Tolerance Assessment, calibrated specifically for those affected by the Pension Freedoms.

Andre Correia, business development director, told Financial Planning Today magazine: “This instrument will look and feel very similar to the existing Risk Tolerance assessments, and it is intended to replace the current RTAs for investors approaching or at the point of retirement. The resulting Risk Tolerance measure will have been calibrated and validated with that demographic in mind, and further will reveal more about the investor’s loss aversion than the tradition accumulation focused assessments.”

The firm said that this was the first in a range of new developments for ageing investors.

Mr Correia said: “The next 12 months will see significant enhancements on the platform, with additional functionality offered, such as the ability to further customise the process to include more of the KYC/Risk Profiling component. That flexibility has already proved useful to our clients, and they will benefit even more from being able to customise their investor journey by adding and removing assessments that mirror they’re intended interaction with the investor.”

The company has also developed the next generation of its standard Risk Tolerance Assessment, which it said was about to be completed soon.

Mr Correia said: “The accumulation Risk Tolerance assessments have been revamped to explore more aspects of the investor’s financial personality, and provide a measure of Risk Tolerance that is adjusted to correct for measured biases that have been academically tested to have an inflationary/deflationary effect on Tolerance.

“Such biases include over confidence/under confidence, optimism/pessimism on the outlook of the markets, trust, knowledge & experience among others.”

He said: “As Risk Tolerance will remain the first pillar of risk profiling, and to which the other risk profiling aspects (Risk Capacity / Suitability) relate, any improvement in the confidence and reliability of the measurement will ensure a more consistent and accurate process of understanding the investor, and providing suitable investments to them.”