Understanding and Managing Risk Profiles

Learning Team

Overview

The Risk Profile feature gives your firm a structured, consistent way to assess a client’s tolerance for investment risk. Advisors, Client Service representatives, Compliance team members, and Management users can complete a questionnaire that scores a client’s responses and maps them to a risk band, which in turn supports recommendations around asset allocation. Because firms’ assessment approaches differ, Practifi allows administrators to customize both the questions asked and the risk bands used to categorize results.

Multiple Risk Profile records can be saved to a single client’s Household, Organization, or Individual record. This makes it easy to track how a client’s risk tolerance changes over time, giving your team a clear historical record to reference during reviews or audits.

System Administrators can enable or disable the Risk Profile feature within your Practifi instance. See the Enabling Risk Profiles article for instructions.

Please note: If your firm uses the eMoney or MoneyGuidePro integration, you may not need the Risk Profile feature’s functionality. Reach out to your Customer Success Manager with any questions about whether this feature is a good fit for your firm.

Creating a Client’s Risk Profile
Viewing a Client’s Risk Profile
Managing Risk Profile Settings
Modifying Question Sets
Modifying Risk Bands
- Editing Risk Bands
- Adding Risk Bands

Creating a Client’s Risk Profile

Risk Profiles are created directly from a client’s Key Entity record and take only a few minutes to complete. The system automatically calculates a risk band based on the client’s responses, eliminating the need for manual scoring.

To create a Risk Profile for a Client in your organization:

Navigate to the Client’s Key Entity record.
On the record side panel, select the Risk Profile navigation icon.
On the Risk Profile record table, click the Create Risk Profile button.
A pop-up window will appear with the Risk Profile questionnaire. Enter the client-specific information and click Save to finalize the Risk Profile.
- Please note: The Risk Band field populates automatically based on the questionnaire responses. If an override is needed, you can enter a value in the Override Risk Band field manually.

Viewing a Client’s Risk Profile

All Risk Profiles saved to a client’s record are available from the same Risk Profile section used to create them. The list view gives a quick summary of each profile, and you can open any individual record to review the client’s full set of responses.

To view a Client’s Risk Profile:

Navigate to the Client’s Key Entity record.
On the record side panel, select the Risk Profile navigation icon.
The Risk Profile page displays a list view showing each questionnaire’s name, date, risk band, and version number.
Click the hyperlinked Questionnaire Name to open the completed Risk Profile questionnaire.
On the Questionnaire record, the Questions tab shows the client’s responses. Click the Basics tab to view the questionnaire name, date, risk band, and version number.

Managing Risk Profile Settings

Users who are assigned the Practifi – Risk Profile – Administrator permission set can modify Risk Profile questions and Risk Band settings to align the feature with your firm’s specific assessment approach and compliance requirements. For instructions on managing Risk Profile permissions, please see Enabling Risk Profiles.

Modifying Question Sets

Your Practifi organization comes pre-loaded with a standard set of Risk Profile questions. You can customize the wording of these questions and their answer options to match your firm’s preferred language and methodology. To preserve version control, the system requires you to create a new question set before making changes, rather than editing the active set directly. This means each version of your questionnaire is stored as a separate record, making it easy to track changes over time.

To create a new question set:

Click the App Launcher in the upper-left corner of Practifi.
Select the Settings app from the available app drop-down menu.
- Please note: Depending on the number of apps assigned to your profile, the Settings app may not display by default. If it does not appear, use the Search apps and items search bar within the App Launcher to find and select the Settings app.
Click the Navigation Menu and select Risk Profiles.
On the Risk Profiles page, click the New button.
On the New Question Set tab, the Name field is not editable. A name will be automatically generated when the question set is saved.
Enter a number in the Version field, or leave it blank to have this automatically populated upon saving.
Check the Active box.
Click Save.
Optionally, click the caret at the top of the Question Set record and select Import Default Questions. This will populate the question set with the standard Risk Profile questions, which you can then edit to suit your firm’s needs.
A warning message appears. Click Import to confirm.

Editing Questions

When setting up a new question set, you can change the text of any question and add, edit, or remove its answer options. To edit a question within a question set:

Click the hyperlinked Question Name in the Questions list view.
On the question’s details page, click the Edit button.
In the edit window, update the Description field, then click Save.
To edit a question’s answer, click the hyperlinked Answer Name in the Answers list view.
On the Answer’s details page, click the Edit button.
In the edit window, update the Name field, then click Save.
To add an answer to the question, click the New button in the Answers list view.
Enter the following information for the new answer:
- Name - Enter the answer as you would like it to display within the questionnaire.
- Code - Give a unique value to the answer, e.g., ANSWER001.
- Order - Set the order in which you want the answer to appear within the answer drop-down menu, e.g., 1.00.
- Active - Check this box to have this answer active and available for selection within your organization.
- Score - Enter the value you want this answer to add to the client’s Risk Profile, e.g., 3.00.
To delete an answer, click the caret in the answer’s row, then select Delete.

Adding Questions

In addition to editing existing questions, you can add questions to your firm’s questionnaire. Question sets support a maximum of 15 questions. To add a question to a question set:

On the Question Set record, click the New button in the Questions list view.
On the New Question tab, enter the following:
- Description - Enter the question as you would like it to be displayed in the questionnaire.
- Order - Set the order in which you want the question to appear within the questionnaire, e.g., 1.00.
- Code - Give a unique value to the question, e.g., QUESTION001.
- Active - Check this checkbox to enable this question in your organization.
Click Save.
Clicking Save will take you to the question’s details page, where you can add answer options. Click the New button in the Answers section to add an answer.
Enter the following information for each answer:
- Name - Enter the answer as you would like it to display within the questionnaire.
- Order - Set the order in which you want the answer to appear within the answer drop-down menu, e.g., 1.00.
- Code - Give a unique value to the answer, e.g., ANSWER001.
- Active - Check this box to have this answer active and available for selection within your organization.
- Score - Enter the value that you would like this answer to add to the client’s Risk Profile, e.g., 3.00.
Click Save to finalize the answer, or click Save & New to save the current answer and immediately begin creating another.

Deleting Questions

To remove a question from a question set:

On the Question Set record page, click the caret on the question’s row in the Questions list view, then select Delete.
A warning message appears. Click Delete to confirm.

Modifying Risk Bands

Your Practifi organization comes pre-loaded with a standard set of Risk Bands that map questionnaire scores to risk categories. These bands can be edited to reflect your firm’s terminology and scoring thresholds, and new bands can be added if your assessment approach requires more granularity. Before making changes, it’s worth reviewing your full score range so that every possible questionnaire total falls within exactly one band, with no gaps or overlaps between them.

Editing Risk Bands

The pre-loaded Risk Bands can be adjusted to match your firm’s terminology and scoring thresholds. To edit an existing Risk Band:

If not already in the Settings app, click the App Launcher in the upper-left corner of Practifi.
Select the Settings app from the available app drop-down menu.
- Please note: Depending on the number of apps assigned to your profile, the Settings app may not display by default. If it does not appear, use the Search apps and items search bar within the App Launcher to find and select the Settings app.
Click the caret icon beside the Navigation Menu to open the drop-down menu of settings pages.
From the drop-down menu, select Risk Bands.
Click the caret icon next to Recently Viewed to switch the list view to All.
Click the hyperlinked Risk Band Name for the Risk Band you want to edit.
Click the Edit button located on the right-hand side.
Make the necessary adjustments and click Save to finalize the changes.

Adding Risk Bands

If your firm’s scoring approach requires more granularity than the pre-loaded Risk Bands provide, you can add new ones. To add a new Risk Band:

If you are not already on the Risk Bands page in the Settings app, click the App Launcher in the upper-left corner of Practifi.
Select the Settings app from the available app drop-down menu.
- Please note: Depending on the number of apps assigned to your profile, the Settings app may not display by default. If it does not appear, use the Search apps and items search bar within the App Launcher to find and select the Settings app.
Click the caret icon beside the Navigation Menu to open the drop-down menu of settings pages.
From the drop-down menu, select Risk Bands.
Click the caret icon next to Recently Viewed to switch the list view to All.
Click the New button on the right-hand side of the Risk Bands list view.
Enter the following information:
- Risk Band Name - Enter the Risk Band name as you would like it to display within Practifi.
- Source-Identify the source of risk bands.
- Lowerband - Enter the lowest value a Client would have from their questionnaire to qualify for this Risk Band.
- Code - Give a unique value to the answer. For example, “RBGROWTH”.
- Active - Check this box to have this Risk Band active and available for selection within your organization.
- Upperband - Enter the highest value a Client would have from their questionnaire to qualify for this Risk Band.
- Last Sync Date- Update this whenever a sync from Envestnet to Practifi is completed for this record.
Click Save to finalize the new Risk Band, or click Save & New to save the current record and immediately begin creating another.