Investments for individuals

How do you choose the right investment strategy for your client? Knowing your client's financial personality type will help you to make investment decisions that will match their risk appetite and individual preferences.

In the last two editions of FAnews, we discovered that there are nine different financial personalities, according to the Moneymax Money Personality Assessment, and we discovered the type of investment strategies that suit the Safety Players, the Optimists and the Entrepreneurs best. In this article we take a look at the next three personalities – the Hunters, the High Rollers and the Achievers.

The Hunters

In general, the Hunters find it easier to make financial decisions if they can rely on someone else's advice, since they experience intense feelings of self-doubt and inadequacy about money matters.Hunters as a group are well-educated and have the highest percentage of professional and managerial positions of all of the types, yet their income is average and their assets are even lower. They may spend as much as they earn, often for emotional reasons, buy status symbols as rewards for their hard work and save very little.

Investment choices

Although they are risk-averse as a group, Hunters who do own individual stocks and mutual funds are fairly satisfied with them. Hunters are dissatisfied with most other investments. They are often unaware of the financial options available to them, and need a good push to begin a diversified financial plan.Hunters benefit from a regular investment programme in which money is automatically deducted from a bank account and invested in mutual funds before they can spend it. Providing Hunters with financial education programme will be of tremendous help, even though they may offer some initial resistance to the idea.

The High Rollers

High Rollers relish the thrill associated with taking risks. They use money to satisfy their desire for excitement, power, and prestige and spend rather than save money. They allow their emotions to guide their financial decisions and have no specific strategy. As a result, they experience anxiety about their money management skills.

Investment choices

High Rollers enjoy investing in riskier vehicles, such as commercial property, options, futures, and emerging growth companies. They prefer direct ownership of stocks to mutual funds. High Rollers benefit from consulting with a financial advisor who can educate them, enforce investment discipline and can determine the percentage of the portfolio that should be allocated to the different levels of growth, safety, income, and tax advantage.

The Achievers

Achievers are practical and rational about money and prefer conservative, low-risk investments. Since they like to be integrally involved with their money management and are proud of the way they manage their money, they have difficulty delegating their money management to others. Their intense need to control and their distrust of can keep them from benefiting from others' knowledge and expertise.

Investment Choices

Achievers prefer residential property investments that they can directly control. They make use of the stock market as an investment, and are satisfied with annuities. Achievers as a group are not interested in unusual or high-risk investments such as futures or options. Advisors can help Achievers by providing them with concrete information that is of use to them in their own investment management. Once their need for total control is overcome, Achievers often become Money Masters.