Risk Tolerance | Spoke Fund ®

	calesmith	0
	I got a similar question last week from another future spoke manager - specifically with regards to structuring the investment advisory contract given that everyone is going into the same fund, regardless of risk tolerances. Here's my response to him from that email thread, which I think might apply to your question, too: "The short answer is, I'm 'selling' the fund, not a whole suite of advisory services, and that comes with a certain uniformity (of risk, too) that investors have to accept as part of coming onboard. A few have not, and they didn't invest, and that's better for both sides. During the process of talking about the fund they may come to realize that it may not be a fit for them, and I certainly don't try to be everything to everyone. So, they're made very clear on everything upfront, and if the terms of the IAC aren't a good match, I don't change the IAC for them...they just don't invest. I think there would be an issue if people came to ya for general advice, and every diagnosis you gave ended up with "you should really invest in my fund" and then massaged the IPS language to make it feel like more of a fit than it otherwise might...as some guys may very well do. But I feel like I'm doing the exact opposite here. Probably too dramatic to call it a 'take it or leave it' approach, but not too far off, either. So I think the IAC here does exactly what it's supposed to do - makes sure everyone (PM and investor) are on the same page going in to things." I also went on to explain how my compliance consultants are okay with that approach, as are the lawyers I've worked with. So in general, I'm confident enough in the above approach that it's how I've been doing things since day one...trying to keep that balance between keeping the onboarding process as efficient as possible while making sure everyone knows exactly what they're investing in, and why. I think another good related question is: how do the mutual fund companies address the same issue? Funds are not customized, there is no true assessment of risk tolerance, no suitability screen, etc. Of course, to even ask that of them assumes they haven't already abandoned their fiduciary duty - which may be naive in the extreme, I suppose.. Cale
	Wed, May 4 '11 at 1:41AM EDT	Post 2 • IP

	johnrothe	0
	How are you all handling risk tolerance? I am not customizing my fund to individual clients. I am wondering what the best way to address if the fund is suitable (or that I am meeting my fiduciary responsibility) for potential clients Would love to hear any thoughts. Thanks! John Rothe Portfolio Manager ARTAIS Fund
	Fri, Apr 29 '11 at 2:45PM EDT	Post 1 • IP

Risk Tolerance28