Identifying and resolving mismatches is a critical step in the risk profiling process and one where the advisor can demonstrate both the technical value of their services and their ability to work collaboratively with clients in problem-solving.
Mismatches are common and their discussion and resolution with the client makes for a strong relationship between you.
Typically, the client won’t be able to achieve their goals from resources available (risk required) with the required certainty (risk capacity) at the level of risk they would choose to take (risk tolerance).
Alternatives to be investigated include:
easing goals - delaying, reducing, forgoing;
increasing resources - saving more, converting personal use assets to investment assets; and
taking more risk - but not so much as to trigger a panicked sale in a downturn.
Here the advisor’s role is to suggest and explain alternatives, coach and guide but not decide.
Occasionally, the client is easily able to achieve their goals from the resources available with less risk than they would choose to take. In this happy situation the client might consider some combination of increasing goals, spending more now or taking less risk.