Five tips when assessing client capacity for loss

The tips follow a recent discussion on capacity for loss attended by the Association of Professional Financial Advisers (APFA) and Unbiased.co.uk 1. Capacity for loss should be considered as a distinct part of the fact find process, separately from attitude to risk. 2. Advisers should consider non-financial issues such as lifestyle and wellbeing, which may also impact a client's propensity to withstand losses. 3. Cashflow planning is a good way of demonstrating to consumers the effect of losses on their future financial situation. 4. Capacity for loss should be reviewed on a re...